Binance Confirms the Buyout of FTX Exchange Amid Recent Drama, FTT Tokens Plunge 75%

After all the drama surrounding the liquidity problems at FTX exchange and Alameda Research, the world’s two biggest exchanges - FTX and Binance - confirmed their merger on Tuesday, November 8.

FTX chief Sam Bankman-Fried announced on Twitter that Binance will buy FTX’s non-U.S. businesses for an undisclosed amount. He wrote: "Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com".

He further thanked the Binance chief saying: “CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.”

A few minutes later, Binance chief Changpeng Zhao also confirmed the same adding: “This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days”.

Note that the deal will affect only the non-U.S. businesses of Binance and FTX. The U.S. arms of both these companies remain unaffected confirmed Sam Bankman-Fried. Also, note that the deal hasn’t closed so far as both the companies need to complete a due diligence.

On Tuesday, FTX’s native cryptocurrency FTT tokens tanked by a staggering 75%. As of press time, the FTX token (FTT) is trading 75% down at a price of $4.54. In the last 24 hours, the FTT token valuation has plummeted by more than $2 billion. Ever since Binance announced the liquidation of FTT tokens, its valuation has dropped by more than $3 billion.

The contagion of the FTT token collapse has spread across the entire cryptocurrency market. The broader crypto market has lost more than $100 billion in the last 36-hours with total crypto market cap plummeting to $904 billion.

Bitcoin (BTC) briefly touched a new 2022-low at $17,500 on Tuesday amid major sell-off. Currently, the world’s largest crypto is trading 10% down at a price of $17,711 and a market cap of $341 billion.

The correction within the altcoin space is even sharper. Etheruem (ETH) has plummeted 20% in the last 24-hours and is currently trading at $1,206. All of the top-ten altcoins are down anywhere between 10-20%.

The biggest impact of the FTX token crash is on Solana (SOL) which has corrected 40% in the last 24-hours and is currently trading at $17.1. FTC’s sister concern Alameda Research was one of the biggest investors in Solana holding $1.2 billion worth of SOL. However, amid the FTX token (FTT) crash, Alameda has been selling SOL in huge quantities to buy FTT and protect it from further price fall.

After the recent episode at FTX, Binance chief Changpeng Zhao has pledged to implement Proof-of-Reserve mechanism at the exchange for “full transparency”. He has also urged other exchange to adopt a similar stand. In the last five days, SBF’s net worth has plummeted by more than 90% as he loses the crypto-billionaire status.