Monday, March 4, 2024

Binance Pulls Out OF FTX Deal, Bitcoin Crashes Below $16,000

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Crypto exchange Binance is officially out of the FTX agreement. According to an official statement, the company won’t purchase its competitor.

Via its official Twitter handle, Binance claims that regulatory pressure and other factors impacted their decision. The report claimed that the company reviewed FTX’s books and decided to walk out of their non-binding agreement. The company said:

As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com.

Binance Walks Away, Crypto Industry In The Dark

Before the official announcement, there was much speculation about Binance pulling out of the deal because of potential legal consequences. The company claims it was trying to protect crypto investors.

Thousands of users report that their funds remain stuck on FTX. The crypto exchange halted new withdrawal requests yesterday due to a “liquidity crunch.”

Binance was allegedly trying to fill this hole by acquiring the company and to provide liquidity for the users. However, the situation went “beyond our control or ability to help,” the company claimed while adding:

Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.

As a result of today’s event, the crypto market has seen massive losses. The number one cryptocurrency by market capitalization, Bitcoin, is trading well below its 2020 all-time high. BTC’s price trades at $16,000 with 11% and 20% losses in the last 24 hours and the past week, respectively.

Binance BNB BNBUSDT Bitcoin
BTC’s price trends to the downside on the daily chart. Source: BTCUSDT Tradingview

Beyond the price action in large cryptocurrencies, which continues to record new lows for 2022, this week’s events negatively impact the crypto industry. In the U.S., regulators are already announcing investigations and denouncing the sector for “harming” investors.

Across the crypto community, the consensus points towards stricter regulations and darker days for the nascent asset class.

Don’t know what to say anymore.

Will just say things seem bleak right now and they are. Emotions are running high. Recovery seems impossible.

Just don’t do anything drastic people. It’s not worth it.

— Hsaka (@HsakaTrades) November 9, 2022 

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