Binance has acquired the embattled FTX after the latter’s FTT token lost 80% in trader sell-off. Binance initially rejected FTX’s offer to absorb FTT at $22 apiece before purchasing the exchange.

In a shocking turn of events, cryptocurrency exchange FTX has agreed to be acquired by Binance. Details of the transaction, including the sale amount, are pending a due diligence report. FTX CEO Sam Bankman-Fried announced the “agreement on a strategic transaction” via Twitter.

​​ FTX has been embroiled in a liquidity crisis for the past 48 hours after investors began selling off the FTT. The sell-off began after it was uncovered that BitDAO requested proof-of-funds from FTX’s sister company, Alameda Research. 

After Alameda disclosed the financial data, it was further revealed that Alameda was backed by FTX’s FTT token, not a third party stable asset such as a fiat currency. The market responded by selling off the associated FTT tokens en masse. FTT plummeted 80% with $2.5 billion cut from its market cap in one day.

FTX CEO, Sam Bankman-Fried, responded to the liquidity crisis by burning FTT to limit circulation and injecting capital from the exchange’s USDC reserves to mitigate the crisis. 

The crypto exchange Binance was approached by FTX to buy up FTT, but CEO Changpeng “CZ” Zhao refused the offer. Yet, by Tuesday morning it had announced that it was officially acquiring the FTX US exchange.

CZ tweeted that his company has signed a non-binding letter of intent (LOI) and will acquire the Bahamas-based exchange upon the conclusion of due diligence. 

Binance and FTX merge

Now, it looks like FTX is about to get even bigger. Binance, one of the largest exchanges in the world, has agreed to acquire FTX for an undisclosed sum.

This is a huge win for both Binance and FTX. For Binance, it gives them a much needed boost in the derivatives market; and for FTX, it gives them the resources of one of the biggest exchanges in the world.

It's still early days, but this could be a game-changing acquisition for both parties involved. We'll be sure to keep readers updated as more details emerge.