Binance stopped buying FTX due to misappropriation of customer assets

Yesterday, there were reports that Binance might buy the cryptocurrency exchange FTX, and now, the largest cryptocurrency exchange seems to have given up on this decision. With the acquisition, Binance intended to help the cryptocurrency exchange’s “liquidity problems,” but now says its “problems are beyond its control or capabilities.”

Binance In his statement It also explains that “news reports about the misappropriation of client assets and alleged investigations by the US agency” caused them to pull out of the deal. In the tweet of this exchange, it is written:

“As a result of the necessary corporate reviews, as well as the latest news reports regarding customer abuse and the alleged US agency investigation, we have decided not to pursue a potential acquisition of FTX. “Initially, our hope was to be able to support FTX customers with liquidity, but things are beyond our control or ability to help.”

Binance statement about canceling FTX purchase

In addition to the liquidity crisis, the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are investigating FTX’s relationship with its sister entity, Alameda Research, as well as with FTX US. The investigation, which has not been publicly disclosed, “began months ago as an investigation into FTX US and its crypto-lending activities,” Bloomberg explained in its report.

Alameda Research, the cryptocurrency trading firm run by FTX chairman Sam Benkman-Fried, was caught off guard when it disclosed its financial balance sheet this week, citing an unusually close relationship with FTX through FTT, the exchange’s native token. , received a lot of attention. Binance CEO Changpeng Zhao also said that he would sell his holdings of the FTT token, which put pressure on FTX.

Since then, FTT holders have been crowd-selling their tokens. Zhao claims that Benkman-Fried then called him and asked Binance to bail out his troubled exchange. Now it seems that Zhao and the Binance exchange have given up on rescuing and buying FTX for the reasons mentioned.

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