Binance abandons bid for FTX. Justin Sun says he will help find a ‘solution’.

The cryptocurrency exchange Binance has abandoned its bid to acquire FTX. The company said it would be unable to resolve the platform’s problems.

In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.

— Binance (@binance) November 9, 2022

As a result of a comprehensive corporate review, as well as in light of the latest news reports about mismanagement of customer funds and alleged investigations by US agencies, we have decided that we will decline a potential acquisition of FTX.com.

On November 6, Binance chief Changpeng Zhao said that the exchange aimed to dispose of the FTX utility token (FTT). Assets together with BUSD totaling about $2.1 billion formed the outcome of the firm’s exit from its portfolio investment in the platform.

Against the backdrop of concerns about FTX’s financial stability, the FTT price for several hours plummeted by nearly 30%. According to CoinGecko, the token fell 90% over the week (−47% in the last 24 hours). At the time of writing, the asset trades near $2.44.

On November 8, Sam Bankman-Fried and Changpeng Zhao announced a strategic partnership. It was intended to address the liquidity crisis and envisaged a possible acquisition of FTX by Binance.

Then Zhao stressed that his company reserved the right “to withdraw from the deal at any time.”

After Binance’s decision not to acquire the platform, Tron founder Justin Sun said that together with FTX they “are developing a solution that will allow moving forward.” He did not specify what initiative is under discussion.

The ongoing liquidity crunch, despite short term in nature, is harmful to the industry development and investors alike.

— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) November 10, 2022

«Несмотря на краткосрочный характер, продолжающийся дефицит ликвидности наносит вред развитию отрасли и инвесторам. Моя команда работает круглосуточно, чтобы предотвратить ухудшение ситуации. Я верю, что проблема преодолима благодаря комплексному сотрудничеству с нашими партнерами», — отметил он.

Later, Sun added that FTX resumed trading of Tron (TRX) on its platform, and that the parties were working to restore withdrawal functionality.

This is only the initial step taken towards a wholistic solution that is being crafted to resuscitate and return to normalcy for all #FTX users. I greatly appreciate the collaborative work between @FTX_Official teams 🔥

— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) November 10, 2022

«This is only the first step on the path to a holistic solution that is being developed to resuscitate and return to normalcy for all users of FTX», — wrote he.

As noted by Coin Metrics’ head of R&D Lucas Nucci, a possible cause of FTX’s collapse could be a substantial financial backing Alameda Research provided in Q2 2022.

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