Breaking: Binance Might Scrap FTX Takeover Over Poor Internal Review

After less than a day of assessing the company, cryptocurrency exchange giant Binance is very unlikely to proceed with its proposed acquisition of struggling rival FTX, according to a person with knowledge of the situation. Due diligence was a condition of Binance’s non-binding letter of intent for the acquisition, which was made public on Tuesday as FTX’s financial situation appeared to be spiraling out of hand.

After evaluating FTX’s internal data and loan agreements for around half a day, Binance has decided strongly not to pursue the deal, an anonymous source close to the company claimed.

Read More: SEC Probing FTX Liquidity Crunch, Snam Bankman-Fried Crypto Empire 

In response to these rumors, Patrick Hillmann, Binance’s Chief Strategy Officer stated:

“We’re just 36 hours into the due diligence process. Once we have completed that, we will make a decision based on what’s in the best interest of Binance’s users across the globe. We’ll share more information when we have a more substantive update to provide.”

Putting brakes on the deal would be another remarkable development in a week of drama. Earlier, CZ had stated that officials from FTX reached out to him as there was a significant liquidity crunch. In order to help cover this, Binance would be acquiring the whole of FTX.

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

The biggest exchange in the world, Binance, was the first to support FTX, but as the latter company gained more prominence, their partnership began to fall apart. The two executives had been criticizing one another on Twitter for a while, and on Sunday, Zhao announced that Binance would be selling its FTT holding, the native token of FTX exchange. They had received it as part of an exit from the company last year.