“Who needs Netflix when you’re in crypto?” commented one user on Twitter as the crypto industry tries to digest the acquisition of cryptocurrency exchange FTX by rival Binance. The deal, disclosed on Nov. 8, has been compared to a “chess move” by some, insinuating that Binance’s strategy intentionally led to the deal.
Twitter users claimed that “CZ just ran the most gangster game we’ve ever seen in Crypto, period,” referencing the series of tweets from Binance CEO Changpeng Zhao that sparked the buzz. acquisition.
CZ just ran the most gangster game we’ve seen in Crypto, period. BALLS on this man. Congratulations.
Kudos also to Sam for choosing the right option that protects clients’ assets, swallows his pride, and doesn’t burn everything in a pointless fight.
— Autism Capital (@AutismCapital) November 8, 2022
The community also compared the move to Musk’s acquisition of Elon on Twitter:
— CSTart.hft (@cosmoaker) November 8, 2022
In a brief recap, in a November 6 tweet, Zhao announced that the decision to liquidate Binance’s position in the FTX (FTT) token was made after “recent revelations that have come to light,” citing “post-release risk management” reasons.
FTX Founder and CEO Sam Bankman-Fried, or SBF, took to Twitter on Nov. 7 to claim that a competitor was trying to tackle cryptocurrency exchange with false rumours. “FTX’s assets are doing well,” he said, saying he has enough funds to cover all client holdings and does not invest client assets even in treasury bills. In the same thread, SBF also called for a collaboration with rival exchange Binance.
As reported by Cointelegraph, the series of tweets triggered a selloff in FTX Token that broke below the pattern’s support line near $22.50, accompanied by a spike in volume. The selling continued below the support line and the token is down over 57% in the past 24 hours, trading at $9.70 at press time.
In a message to FTX staff this morning, SBF said $6 billion net had been withdrawn from the platform in the past 72 hours, causing the exchange to “go on hiatus”, adding that the situation would be resolved in “the near future”, ” according to reports.
November 8, SBF and CZ announced the acquisition citing a “cash crisis”, implying that the liquidation of Binance shares led to the insolvency of FTX. The FTX CEO opted to seek a “bailout from the competitor who triggered the bank run in the first place,” one Twitter user wrote of the legal options the exchange had amid the liquidity crunch.
1/ Ok, so I’m just saying this out loud because I’m pretty blown away that FTX chose – of all options, a buyout of Binance.
Here are the options open to SBF: (a) seek emergency debt financing, (b) seek new silver investments, (c) liquidate assets and/or (d) buy time…
— wassielawyer (@wassielawyer) November 8, 2022
The deal is still pending regulatory approval, and it’s unclear whether any antitrust issues would arise from the deal.
Binance has signed a non-binding letter of intent (LOI) declaring its intention to purchase FTX. Zhao added that Binance was “assessing the situation in real time” and had the ability “to withdraw from the agreement at any time”.