- Changpeng Zhao’s Binance may pull out of the deal to buy FTX, CoinDesk reported citing sources close to the matter.
- Zhao previously said the acquisition was “non-binding” and subject to due diligence.
- Sam Bankman-Fried sought help from silicon valley billionaires and other large exchanges before turning to CZ, per prior reports.
A takeover deal to bail out Sam Bankman-Fried’s crypto exchange FTX might break down after the buyer, Changpeng Zhao’s Binance, assessed SBF’s platform and its holdings.
A CoinDesk report said the acquisition was “highly unlikely” following a due diligence review mentioned by CZ. Although the report cites persons close to the matter, details regarding FTX’s internal data and coffers remain unavailable to the public.
A note to Binance employees from Zhao himself also instructed minimal communication on the matter until more developments emerge. CZ said Binance had paused offloading its FTT bags for the meantime.
Binance To Buy FTX
On Tuesday, CZ tweeted that Binance entered a “non-binding” agreement to tackle the liquidity crunch. Zhao noted that due diligence was required before bailing out Sam Bankman-Fried’s crypto exchange. With that in mind, Binance exiting the deal was a possibility.
Analysts surmised that CZ’s Binance could command as much as 80% market share if the deal is finalized and the takeover executed. However, the alternate ending might be a big blow to SBF and his FTX crypto exchange.
Sources said that SBF reached out to other crypto exchanges and billionaires in Silicon Valley before calling CZ for aid sometime on Tuesday. This means Zhao’s Binance was possibly the only industry player able to save FTX from insolvency.
Singaporean state-funded venture company Temasek also engaged FTX in talks. Temasek along with other giant institutions like SoftBank and USDC issuer Circle invested in SBF’s exchange, The Block’s Frank Chaparro tweeted.
Circle’s CEO Jeremy Allaire dispelled speculation and clarified that the stablecoin issuer has “no material exposure” to SBF’s crypto exchange. Similarly, Tether (USDT) CTO tweeted a similar disclaimer claiming no exposure to FTX.