• Binance is abandoning its plans to acquire FTX.

  • Binance cited that FTX mishandled customer funds and is alleged to investigate.

  • FTX, valued at $32 billion early this year, is in danger of going bankrupt.

Binance has withdrawn its plans to acquire FTX after examining the organization’s structure and financial situation, the company announced on Wednesday, putting Sam Bankman-Fried’s empire on the verge of bankruptcy.

One day earlier, Binance CEO Changpeng Zhao revealed that the world’s biggest crypto company had struck a non-binding agreement to acquire FTX’s non-U.S. operations for an undisclosed amount, saving the business from a liquidity crunch.

But now, with Binance backing out, the company is in a precarious position. Zhao said in a statement:

After careful consideration, we have decided to withdraw our offer to acquire FTX.

In the beginning, Binance said in a tweet on Wednesday, “our objective was to be able to serve FTX’s customers to provide liquidity.” Furthermore, he added, “ But the issues are beyond our control or ability to help.”

The decision by Binance comes as the crypto market is seeing a significant correction.

Zhao initially consented to help, but his company swiftly changed its mind, citing accusations of “mishandled customer funds and alleged U.S. agency investigations.”

The collapse of the Binance-FTX deal is the most recent episode in a startling implosion that has shaken the crypto community this week. On Monday, Bankman-Fried tried to convince investors that the company’s assets were secure.

Between Monday and Tuesday, FTT lost 80% of its value, dropping to $5 and wiping out more than $2 billion in a single day.

On Wednesday, it fell by more than half to about $2.30, bringing the entire market value of the tokens in circulation down to about $308 million.

Amid the deal turbulence, cryptocurrencies have fallen, with bitcoin plummeting 15% on Wednesday. For the first time since November 2020, it is currently trading below $16,000. With the ongoing events, BTC and Ethereum have seen a sharp decline as well. Notably Ether has declined more than 30% in the last two days and is on the verge of dropping below $1,000.

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