Binance Buys FTX and Its Impact on Crypto Industry

Binance stated the buyout of FTX, its biggest rival on Tuesday. It is one of the biggest Crypto Exchange mergers in the industry. As earlier there we restatements from Binance itself, that FTX is on the verge of breaking up and it has a liquidity issue. Now this sudden buyout is boosting those rumors.  Also, the Binance Founder states that FTX asked for their help to manage the liquidity crunch, in the asset. Now Binance is going to provide the help and look over the complete matter and stable its condition.

Binance view on the Crypto Exchange Merger –

The deal comes after the Binance founder Changpeng Zhao and FTX founder Sam Bankman-Fried’s months-long clash on social media, which escalated earlier this week. Also as FTX was not doing so well earlier, in the Crypto market. It may be good news for FTX, after all.

Zhao mentioned in a statement Binance decided to help after the FTX asked the crypto giant for help. “To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” he said in a tweet.

“Binance has the discretion to pull out from the deal at any time,” Zhao, more popularly known as CZ, cautioned. But “the important thing is that customers are protected,” said Bankman-Fried, or as many call him, SBF.

Binance, the world’s largest crypto exchange, is the first investor that backed FTX. The closure of the deal may attract regulatory scrutiny.

The perspective of Industry Experts and big firms over this –

Kris Marszalek, CEO,Crypto.com, mentioned on Twitter that “this again calls attention to the importance of transparency: A sad day for the industry. This once again confirms that building with compliance and security as our foundational pillars is the right long-term call. We recognize the importance of transparency and will continue to engage regulators to strengthen and safeguard our industry so that what has happened today is not repeated.”

Brian Armstrong, chief executive officer (CEO), of Coinbase, Tweeted that “more heavy-handed regulation” may be the result: “Part of the issue here is that regulators have been focused onshore in each of their respective markets, while customers have moved offshore to companies with more opaque and risky business practices … The temptation from events like these is to call for more heavy-handed regulation. This would just make the problem of crypto companies and crypto users going overseas worse.”

Expected impact on the Industry –

This buyout of FTX, by Binance, is a major Crypto exchange merger to date. There may be a chance of illiquidity from the three-year-old, crypto Exchange platform. Also apart from every other Exchange Crypto assets like PTX, OKB, BNB, etc are performing very well. Although the other big Crypto assets are going down. FTX is still not doing very well in the market.

To know about the high performing Exchange Crypto Assets, please read “Exchange Tokens are performing better than other Crypto tokens”