Binance is walking away from its deal to rescue Sam Bankman-Fried's collapsed FTX crypto exchange, citing issues 'beyond our ability or control to help'
- Crypto exchange Binance walked away from a deal to acquire rival FTX, reports said Wednesday.
- The issues at the exchange founded by Sam Bankman-Fried "are beyond our control or ability to help," Binance said.
Binance stepped away Wednesday from plans to purchase FTX, unable to overcome issues surrounding the rival crypto exchange founded by Sam Bankman-Fried.
"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 FTX.com," Binance said in a statement.
"In the beginning, our hope was to be able to support FTX's customers to provide liquidity, but the issues are beyond our control or ability to help," Binance said.
Coindesk earlier Wednesday reported that Binance was likely to nix the deal after reviewing FTX's internal data and loan commitments.
The developments marked a stunning about-face from just a day earlier.
Changpeng Zhao, Binance's CEO and co-founder, said Tuesday that FTX asked his company for help amid a "significant liquidity crunch." Binance was performing its due diligence on FTX under a non-binding letter of intent for the purchase, a move taking place less than a year after FTX carried a $32 billion valuation.
Before striking a deal with Binance, FTX had sought help from other large exchanges Coinbase and OKX but it was turned down, according to the Coindesk report.
Cryptocurrency investors are closely watching developments surrounding FTX, the digital assets empire run by Bankman-Fried that's split into FTX, the cryptocurrency exchange, and Alameda Research, a crypto trading firm.
Contagion fears began cropping up last week following reports of heavy exposure to FTX's native token, FTT, on Alameda's balance sheet.
FTT on Wednesday plunged 50% to $2.76, but was off session lows.