FTT Crashes 76%, Bitcoin drops 14%, Binance buys FTX and becomes even bigger

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Binance, the largest crypto platform in the world, reached an agreement last night with Sam Bankman-Fried’s American platform FTX for a takeover during a very eventful day in the cryptosphere. The New York Times called it a ‘megadeal’.

Panic had erupted in recent days after it emerged that much of Alameda, FTX’s main company, had invested a significant amount of its money in FTT (the FTX platform’s cryptocurrency). When that became known, the FTT coin went into free fall and Sam Bankman-Fried, CEO of FTX, had to find a solution quickly.

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 https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.

— CZ 🔶 Binance (@cz_binance) November 8, 2022

$25 to $3

Changpeng Zhao and Sam Bankman-Fried, CEOs of Binance and FTX respectively, had not been of best friends on social media for several months. CZ felt that Bankman-Fried was making too many acquisitions from a bad point of view. According to CZ, the FTX group spread rumors about other companies and then bought them for next to nothing.

When FTX ran into trouble this weekend, Binance announced that it would sell all of its FTT coins. The FTT coin then went into freefall, dropping from $25 to $3 on Tuesday. Bitcoin and Ethereum also lost heavily in volatile trading.

To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days

CZ declared in the evening.

Companies on Wall Street also thought that FTX should get rid of Alameda. In a note to customers, research firm Bernstein said the separation between the two companies was the only solution to avoid further risks.

1. Hey all: I have a few announcements to make.

Things have come full circle, and https://t.co/DWPOotRHcX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).

— SBF (@SBF_FTX) November 8, 2022

Binance, which was already the largest crypto company in the world, is suddenly getting a very large American company in its portfolio, although it cannot touch the customer base. Sam Bankman-Fried, just about the largest crypto donor to the Democratic party and President Joe Biden, has all of a sudden lost a lot of his shine.