Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, on Thursday, Oct. 13, 2022.
Ting Shen | Bloomberg | Getty Images
Binance, the world’s largest cryptocurrency firm, has reached a deal with Sam Bankman-Fried’s FTX to buy the crypto exchange for an undisclosed amount.
Binance CEO Changpeng Zhao tweeted Tuesday morning that “there is a significant liquidity crunch” at FTX and that after FTX asked for Binance’s help, they “signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch.”
Zhao added that Binance will be conducting full diligence in the coming days, and the firm has the discretion to pull out from the deal at any time.
Sam Bankman-Fried confirmed the agreement in a tweet this morning.
Binance and its founder, Changpeng Zhao, was one of FTX’s earliest investors. In a tweet, Bankman-Fried said that Binance would be FTX.com’s “first, and last” investor.
The acquisition impacts only the non-US businesses, FTX.com. FTX.us will remain independent of Binance. The deal, according to Tweets from both Zhao and Bankman-Fried, rests on a non-binding letter of intent, pending full due diligence.
FTT, the token native to FTX, was sharply higher on the news. It is up more than 26% in the last 40 minutes. This comes after a major sell-off that began Monday evening amid concerns surrounding the solvency of both FTX and its sister trading firm, Alameda Research.
Binance’s Zhao said in a tweet that he expects FTT to be “highly volatile in the coming days as things develop.”
This is breaking news. More to follow.
— CNBC’s Kate Rooney contributed to this report.