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Binance Reneges on FTX Acquisition, Markets In Flux

Binance will no longer pursue the acquisition of FTX after performing due diligence, the company announced on Twitter. The decision comes after Binance announced Tuesday they were actively acquiring FTX after they had already rejected FTX’s offer to purchase the exchange’s native FTT token. 

The financial situation for FTX is only getting worse during a week marked by illiquidity and overleveraging. FTX and its CEO, Sam Bankman-Fried, have lost millions after a report from CoinDesk revealed that Mr. Bankman-Fried’s other enterprise, Alameda Research – the sister company of FTX – was largely funded by FTX’s native token FTT. Mr. Bankman-Fried apologized on Twitter in a lengthy thread.

In response, the market shed 80% of FTT, around $2 billion in total. The token plunged from $21.96 on Monday to $3.15 by Tuesday. 

The collapse sent shockwaves through the market; by Wednesday bitcoin had dropped 25% to $15,740 before rebounding back above $17,000 at press time. Investors are also concerned USDT could depeg as the stablecoin dropped to $0.93 during the turmoil.