Why did Binance hold off on acquiring FTX?
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Answer Why did Binance hold off on acquiring FTX?
In an accelerating turn of events, Binance said in a statement that it will not pursue the FTX purchase.
The reason why Binance abandoned the idea of acquiring FTX:
The decision by Binance came after due diligence from the Binance team regarding the inner workings of the debt-laden FTX exchange, news reports of mismanagement of user funds, as well as alleged investigations by US authorities.
The following was stated in the official account of Binance on Twitter:
Every time a major player in an industry fails, retail consumers will suffer.
We have seen over the past several years that the cryptocurrency ecosystem has become more resilient and in time we believe that outliers abusing user funds will be eliminated through the free market.
Also among the main reasons why Binance pulled out of the FTX takeover was FTX’s poor financial records.
In what appeared to be a possible rescue of the platform given liquidity constraints, Binance signed a letter of intent on Tuesday to acquire struggling rival FTX.
But the plan failed after just over 24 hours.
Affected by the news, and the uncertainty surrounding users’ funds, the price of the digital currency FTT has dropped to $2.6 at the time of writing.
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