Crypto exchange Binance to acquire rival FTX

Binance CEO Changpeng Zhao on Tuesday said that his company has signed a non-binding LoI (Letter of Intent) to fully acquire rival cryptocurrency exchange 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 FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days," Zhao said in a series of tweets.

The Binance chief executive said that there is a lot to cover and will take some time. "This is a highly dynamic situation, and we are assessing the situation in real-time," Zhao said, adding that Binance has the discretion to pull out from the deal at any time. "We expect FTT to be highly volatile in the coming days as things develop."

FTX CEO Sam Bankman-Fried said that things have come full circle, and FTX's first, and last, investors are the same. "We have come to an agreement on a strategic transaction with Binance for FTX (pending DD etc)," he said.

Sam said that his teams were working on clearing out the withdrawal backlog. "This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. -- we apologize for that...But the important thing is that customers are protected," he added.

The FTX executive thanked Binance for the deal and said that this is a user-centric development that benefits the entire industry. He said Zhao has done and will continue to do, an incredible job of building out the global crypto ecosystem and creating a freer economic world.

Sam sought to quell the rumours of conflict between the two exchanges. He said: "There have been rumors in media of conflict between our two exchanges. However, Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands."

He said FTX and Binance – two separate companies– are not currently impacted by this. FTX’s withdrawals are and have been live, is fully backed 1:1, and operating normally, he added.