To explain her change of heart, she cited press reports of investigations by US authorities.
The Binance cryptocurrency platform, which announced on Tuesday that it was considering buying the FTX.com platform to help it out of its difficulties, indicated on Wednesday that it was finally abandoning the transaction.
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After conducting an audit of FTX operations, “we have decided not to proceed with the transaction to acquire FTX.com”Binance explained in a tweet, also mentioning press reports of mismanagement of client funds and investigations by US authorities. “At first, our hope was to be able to help FTX customers provide liquidity, but problems are beyond our control or beyond our ability to help”noted Binance, the largest virtual currency platform.
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The future of FTX.com is now uncertain. However, the platform was still considered a solid player in the sector until recently. Its founder, Sam Bankman-Fried, is a figure in the world of cryptocurrencies, and FTX had been valued, during its last fundraising in January, 32 billion dollars. But doubts have recently emerged about his accounts and his relationship with the Alameda cryptocurrency investment fund, also founded by Sam Bankman-Fried. The Alameda site was no longer accessible to the general public on Wednesday.
Binance boss Changpeng Zhao says FTX asked him for help because of a “significant liquidity crisissigned a letter of intent on Tuesday to buy FTX.com, which does not include the US branch FTX.us. However, he also specified that he would conduct an audit for a few days, a usual procedure in merger-acquisition operations, before confirming his intention.
“Every time a major player in an industry goes bankrupt, consumers suffer”Binance pointed out on Wednesday, suggesting that FTX.com customers could suffer from the situation. “We have seen over the past few years that the crypto ecosystem is becoming more resilient and we believe that over time, outliers that misuse user funds will be eliminated by the force of the market”the company added.