The world’s third largest cryptocurrency exchange goes bankrupt, the only hope is to be rescued by Binance, its biggest competitor. However, a recent update showed that the FTX situation is too catastrophic even for Binance.
According to information from CoinDesk, it is highly unlikely that Binance will materialize its proposal to acquire rival FTX after it “takes a peek” at the loss numbers FTX is facing.
Binance even issued a non-binding letter of intent for the acquisition on Tuesday (8) when FTX’s financial position appeared to be spiraling out of control. However, the acquisition relied on Binance’s commitment to FTX’s actual situation.
But as Binance took a closer look at the true situation of the failed exchange, it is now “highly inclined not to make the purchase”.
Binance May Withdraw From Buying FTX After Viewing Exchange Details
It is reported that about 12 hours after reviewing FTX’s internal data and loan commitments, Binance has leaned heavily against completing the transaction, according to a source familiar with the matter.
This indicates that, if the source is correct, the FTX situation is much worse than initially thought, and will hardly have any kind of recovery. As you can imagine, this is a bad sign for customers who may be expecting a positive outcome from the story.
For those who have the FTX token, the FTT cryptocurrency, the problematic situation is very clear, with the coin losing more than 60% in the past 24, in a week of very catastrophic declines.
As is easy to identify, investors who are still holding FTT are in big loss and many are rushing to dump the coins into the market.
After announcing that Binance may be willing to give up on FTX’s acquisition and recovery, the coin took another drop between the morning and afternoon of this Wednesday, the 9th.
There is no market confidence in FTX or FTT. Binance declined to comment on the current status of the proposed deal. FTX also declined to comment.
Bitcoin in the fall
After the carnage caused by the collapse of FTX, the cryptocurrency market is in an uncertain situation.
In fact, the FTX website has gone offline and in that context, the market is facing tough times with potentially escalating legal issues and oversight by the regulatory authorities in all jurisdictions.
In addition, the cryptocurrency market could suffer a deep crash if the uncertainty surrounding FTX’s liquidity problems persists.
The announcement of the possible pullout from Binance’s acquisition of FTX came as a huge negative result for the cryptocurrency market. Shortly after the announcement, cryptocurrency prices began to plummet.
The market has seen a massive loss in the past 24 hours. According to CoinMarketCap statistics, more than $100 billion has been wiped out as a result of the price drop.
Compared to the total cryptocurrency market cap of $935 billion 24 hours ago, the market cap currently stands at $823 billion, wiping out $112 billion in one day.
Bitcoin has fallen by more than 10% in the last 24 hours and has reached its lowest value in the past two years. The digital currency is now trading below 17K and remains in a strong downtrend.
Source: Live Coins
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
