Crypto platform Binance, which had just announced its intention to acquire its troubled rival FTX.com, has said it is withdrawing from the deal.
After an audit of FTX’s operations, “we have unquestionable not to ensue with the acquisition of FTX.com,” it said in a tweet. On Tuesday, Binance said it wanted to acquire FTX “to help customers” after the platform encountered liquidity problems. Those same liquidity problems were partly due to a bank run after Binance started to dump FTX tokens massively.
Binance also mentioned in the tweet press reports about FTX’s mismanagement of client funds and the investigation launched by US authorities. The US Justice Department and the US stock market watchdog have undertaken an initial analysis after the FTX crash earlier this week. Authorities fear FTX did not register all of its funds before selling them to investors.
“Initially, we hoped that we could help FTX customers provide liquidity, but the matters are beyond our control or aptitude to help,” Binance said. As a result, the future of FTX.com is now uncertain. The crypto market has also been falling for several days due to the scandal. A bitcoin is now worth less than $16,000.