According to recent reports from Coindesk, Binance is having second thoughts about going through with the acquisition of its rival exchange, FTX.
Last week, Binance’s CEO Changpeng Zhao announced on Twitter that the exchange would start liquidating the assets correlated to FTX, including its native token FTT.
This measure resulted in catastrophic losses for the exchange. FTX plummeted to 114 million dollars on Friday, November 4th, down from 394 million dollars three days earlier.
On the same day, ether withdrawals also increased substantially.
With FTX experiencing one of the most severe exchange crises in history, CZ saw the rival exchange’s demise as a chance to buy out the competition.
Yesterday, Zhao announced on Twitter that Binance was going to “fully acquire” FTX in a billionaire agreement between the exchanges.
Binance Will Not Acquire FTX After Closer Look At Finances
Nonetheless, after taking a close look at the financial state that FTX, Binance decided to walk back from the agreement.
On Twitter, CZ stated that he had every intention of pursuing the deal with Sam Bankman-Fried about the acquisition between blockchains. However, after receiving inside information about the financial state of the FTX, Binance decided to officially withdraw from the agreement.
CZ Tells People To Not Trade FTT
After the agreement fell off, Changpeng Zhao issued a statement on Twitter about the state of the cryptocurrency sector after FTX’s crisis.
To begin the statement, CZ reassured that – despite the chaotic events that began when Binance chose to liquidate FTT – the chain of events that followed was not the result of his “master plan.”
“We did not master plan this or anything related to it. It was less than 24 hrs ago that SBF called me. And before that, I had very little knowledge of the internal state of things at FTX.” CZ wrote. “I could do some mental calculations with our revenues to guess theirs, but it would never be very accurate, I was surprised when he wanted to talk.”
Later in the statement, CZ made sure to warn its followers to not buy or sell FTT at the moment. He also mentioned that he personally ordered the Binance team to stop selling FTX’s tokens for now.
FTX Going Down is Not a Win For Binance
Despite the general feeling that a rival exchange going down in shambles might be good for Binance.
Along with the downfall of the exchange, FTX dragged the entire cryptocurrency sector along with it. Bitcoin is currently trading at around $15,800, its lowest value since July 2020.
Changpeng Zhao also talked about how the rupture of one of the world’s major exchanges has hurt general user confidence in cryptocurrencies. And also how this occurrence will result in harsher regulations in the future.
“Do not view it as a win for us,” Zhao said. “User confidence is severely shaken. Regulators will scrutinize exchanges even more. Licenses around the globe will be harder to get.”