Kevin Reynolds is Editor in Chief at CoinDesk. He owns bitcoin, ether, polygon and solana.
Binance has scrapped its letter of intent to buy rival crypto exchange FTX, according to a BINANCE spokesperson.
"As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com," the spokesperson told CoinDesk.
"In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help. Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.
"As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger," the spokesperson added.
Binance's withdrawal of its offer capped a whirlwind day-and-a-half in which the world's largest crypto exchange by volume agreed to bail out its troubled rival in the face of a liquidity crunch that was caused, in part, by Binance saying it would sell off all its holdings of FTX's exchange token FTT. CoinDesk had reported earlier that FTX's sister company, trading firm Alameda Research, had much of its balance sheet assets in FTT.
FTT, which had already plunged in recent days, was down another 32% to about $2.41 after the news of Binance pulling out of its deal to buy FTX came out.
UPDATE (Nov. 9, 21:02 UTC): Added statement from Binance.
UPDATE (Nov. 9, 21:24 UTC): Added additional background.
UPDATE (Nov. 9, 21:49 UTC): Added FTT price information.
UPDATE (Nov. 9, 21:49 UTC): Added FTT price information.
