At 5 a.m. on November 10, Binance tweeted that, based on the results of the company’s due diligence, as well as the latest news reports about mishandling of client funds and an investigation by a U.S. agency, Binance decided to drop its proposed acquisition of FTX.com. Binance initially hoped to be able to support FTX’s customers and provide liquidity, but the problems were beyond Binance’s ability to control. Every time an industry heavyweight goes down, retail investors get hurt. Binance has observed that the cryptocurrency ecosystem has gradually become more resilient over the past few years, and misuse of user funds will be eliminated from the market. Binance believes that as the regulatory framework evolves and the industry becomes more decentralized, the entire ecosystem will become stronger.
According to Bloomberg News, citing people familiar with the matter, FTX founder SBF had told investors that if no money was injected into the company, it would need to file for bankruptcy. Before Binance announced it was abandoning its bid to buy a rival exchange, SBF had told investors that FTX was facing a funding gap of up to $8 billion and that FTX was trying to raise funds in bonds, stocks or a combination of the two.
The FTX exchange website is currently functioning normally except for a brief offline in the morning, but the user withdrawal function is still suspended, and the websites of its investment division websites FTX Ventures and Alameda have been unable to connect.
After the announcement, the market panic was triggered. Bitcoin once fell below $16,000, a new low for this year, while FTX’s native token FTT fell to the $2 level.