Sam Bankman-Fried’s crypto business is on the brink of disintegrating as a result of Binance withdrawing from its plans to obtain FTX, the business announced on Wednesday.
The decision to reverse course was made just one day after Binance CEO Changpeng Zhao revealed that the world’s largest cryptocurrency company had struck a non-binding agreement to acquire all of FTX’s international operations for an unknown sum, saving the company from a liquidity crunch. Private investors put FTX’s value at $32 billion earlier this year.
Who is Going to Purchase the Troubled Crypto Exchange?
According to people with experience with the situation, Bankman-Fried was frantically trying to gather money from investment firms and other investors on Monday night before he headed to Binance because of a liquidity crisis. Zhao initially contended to help. However, his business swiftly changed its mind citing the accusation of mismanaged customer funds and purported US agency inquiries.
God knows who is next in the line to purchase the troubled cryptocurrency exchange. According to a person acquainted with the situation, Bankman-Fried informed investors that the business requires emergency funding due to a shortage of up to $8 billion caused by withdrawal demands.
Consequences of the Failure
This week’s dramatic failure has shaken the cryptocurrency community. It continued with the collapse of the Binance-FTX merger. Bankman-Fried attempted on Monday to reassure investors about the firm’s profit. But after Binance’s Zhao made it known that his company was selling his assets in FTX’s native token FTT, the selloff started, and FTX could not stop it.
FTT lost 80% of its value between Monday and Tuesday, dropping to $5 and sweeping over $2 billion in a single day. On Wednesday, it dropped by over half to about $2.30. It brings the entire market value of the tokens to about $308 million.
