It appeared that Binance may be in the process of bailing out its troubled rival, FTX, on Tuesday. The plan, however, crumbled just over 24 hours later.
According to The Wall Street Journal, Binance backed out after reviewing the company’s structure and books. We hoped to support FTX’s customers by providing liquidity, but we cannot do anything about the issues.
“In light of recent news reports regarding the mishandling of customer funds and the alleged investigation by the US government, we have decided to not pursue the potential acquisition of [FTX],” Binance tweeted.
Binance continued, “When a major player in an industry fails, retail consumers suffer.” According to us, the crypto ecosystem is becoming more resilient over the past several years, and we believe the free market will eventually weed out outliers who misuse user funds.
TechQuice did not immediately receive responses from Binance or FTX.
According to CoinDesk, FTX’s loan commitments have raised concerns among Binance’s top brass. It follows Binance CEO Changpeng Zhao’s tweet that FTX down is not for anyone in the industry.”
We may update this story if new information becomes available.