With the signing of a non-binding letter of intent (LOI), Binance has signaled its intention to purchase FTX in its entirety, adding a new twist to the Binance-FTX saga. Binance CEO Changpeng Zhao said this will alleviate the “liquidity crunch,” affecting FTX.
Binance to the rescue
Binance‘s decision to unload its FTX token holdings on Tuesday contributed to a decline in the market capitalization of all cryptocurrencies. Many of the leading cryptocurrencies, including Bitcoin, have experienced falling prices over the past 24 hours as a result of the precipitous collapse of FTT, as investors rushed to liquidate their positions.
Now. It is a “full circle” according to FTX CEO Sam Bankman-Fried, because Binance is both the exchange’s first and last investor.
“Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.),” the FTX CEO tweeted on October 8.
Binance CEO Changpeng Zhao explained the company’s decision in a series of tweets, saying that it came after FTX approached Binance for help. “To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. “We will conduct a full DD in the coming days,” he added.
According to Bankman-Fried, the development has the potential to benefit the whole sector. He went on to say that Zhao has done “an incredible job of building out the global crypto ecosystem” and “creating a freer economic world.”
The cryptocurrency tycoon claims the exchange is striving to resolve the withdrawal backlog after users began complaining about being unable to withdraw their funds.
What is the use-case of $FTT now exactly?
On the back of the acquisition, the value of the platform’s native cryptocurrency, FTT token, has surged more than 22%. While there are no reports on how the token would fit Binance’s ambition, users have founded renewed trust in the popular utility token. FTX Token (FTT) is a utility token that facilitates FTX trading platform functionality. Encouraging token ownership and use, adding value to the FTX ecosystem.
