Top Line

Binance Rival Cryptocurrency Exchange FTX Will Back From Its Agreement To Buy Binance Told On Wednesday afternoon, billionaire Sam Bankman-Fried’s latest in a sudden disclosure of crypto titan FTX, once valued at $32 billion, took the value of the digital asset down with it.

Key Facts

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FTX Liquidity “Issues Beyond Our Control or Ability to Help,” Binance tweeted Hours later, sources told wall street journal And coindesk That the world’s largest crypto exchange is unlikely to proceed with its bailout of FTX following an investigation into the latter’s books.

The scrapping comes just a day after Binance announced a non-binding agreement to buy FTX’s non-US operations as FTX ran a bank to face a liquidity crisis as users withdrew billions from the platform. attempted to withdraw, partly prompted by Binance’s billionaire CEO Changpeng Zhao.

zhao tweeted An apparent reference to a CoinDesk published early Sunday that his firm would sell all of its holdings in the FTX crypto token due to “recent revelations” report good Last Wednesday, Bankman-Fried’s crypto trading firm, Alameda Research, closely linked to FTX, placed its assets largely in the FTX coin.

Although Bankman-Fried on Monday called concerns about its companies’ finances “unfounded rumours,” users flooded FTX with withdrawal requests and exited FTX Coin, the token falling nearly 86% since Sunday, and fell from its market capitalization of $14 billion. March just $825 million.

Crypto assets crashed widely as the industry mourned the loss of its “white night” Bankman-Fried, with shares of bitcoin, ethereum and exchange Coinbase each falling 20% ​​or more since Sunday.

FTX did not respond immediately Forbes‘Request for comment.

big number

$176 billion. How much has the market cap of the world's 15 largest cryptocurrencies fallen in the last 72 hours Forbes' Tracker. The FTX-fueled crash sent the industry from $903 billion to $727 billion.

what we don't know

How will FTX fix its withdrawal pile without the help of Binance? bankman-fried tweeted Tuesday will help Binance “remove the liquidity crunch” and cover the withdrawals “1:1” and his firm may need outside help. Federal financial regulators and the Department of Justice are investigating FTX's behavior during the liquidity crisis, according to bloomberg, An FTX is not legally required to cover withdrawals in the same way that an FDIC-insured bank would, setting up a potentially dire scenario for customers. GlobalBlock analyst Marcus Sotirio told Forbes Crypto firms that went bankrupt in July "are in a really difficult position because they've been irresponsible with customers' funds, somehow lost and are now unable to pay their customers back—and there's no guarantee of that." that they will return the money." Banksman-Fried told investors on Wednesday that the firm faced an $8 billion shortfall and would need $4 billion to remain solvent, Bloomberg said. informed of, Without funding, he said the company would need to file for bankruptcy, the outlet added, citing an unidentified person with direct knowledge of the matter.

important quotes

“As a result of corporate due diligence, as well as the latest news reports about misplaced client funding and alleged US agency investigations, we have decided that we will not pursue a potential acquisition of http://FTX.com,” Binance tweeted,

main background

bankman-fried once referenced As a modern-day JPMorgan himself for his prowess at buying out struggling rivals, FTX's bailout was made all the more dramatic and ironic. With a number of notable crypto exchanges and lenders, the nascent industry has had a year of forgetting and the top assets are shedding nearly 70% in value year-on-year.

Crypto Crash Deepens: Bitcoin Hits 2-Year Low After FTX ImplosionForbes,

Is this the end of Sam Banksman-Fried? ,Forbes,

The crypto crash intensifies amid the collapse of the industry's 'white knight' Bankman-FriedForbes,