Binance Moves to Buy Rival Cryptocurrency Platform, FTX

Binance, the world’s largest cryptocurrency trading platform, said it is moving to acquire rival exchange FTX in a major shake-up of the digital asset industry.

Binance CEO Changpeng Zhao said on Twitter that the companies had signed a letter of intent to move ahead with the deal, which FTX sought in the face of a cascade of customer withdrawal requests it has been struggling to meet. Zhao noted that Binance still needed to conduct due diligence and retained “the discretion to pull out from the deal at any time.”

This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.

— CZ 🔶 Binance (@cz_binance) November 8, 2022

FTX chief executive Sam Bankman-Fried, who has emerged during this election cycle as the second-largest Democratic donor in the country and a major force lobbying on Capitol Hill for crypto regulation, said on Twitter that the company is working to clear out a backlog of withdrawal requests. He said it “may take a bit to settle,” but pledged that “customers are protected.”

Spokespeople for Zhao and Bankman-Fried did not immediately respond to requests for comment.

The move marks a head-spinning turnabout for FTX and its CEO. The platform had been considered a powerhouse in the industry, in part thanks to a huge marketing campaign that pitched the exchange as a reliable brand in a volatile sector — recruiting football star Tom Brady and supermodel Gisele Bündchen as spokespeople, affixing its logo to the uniforms of Major League Baseball umpires and attaching its name to the Miami Heat arena in a $135 million deal.

Bankman-Fried, whose net worth was estimated at $24 billion by Forbes this spring, spent the summer bailing out crypto projects that had gone wobbly after a crash in digital asset prices.