Binance walks out of FTX deal after conducting due diligence

Binance walks out of FTX deal after conducting due diligence

After signing a non-binding agreement to buy FTX yesterday, reports show that the Binance network has walked out of the deal. Reports show that a Binance exchange representative issued a public statement noting that FTX’s problems are too huge for Binance to help.  

Binance cites ciscoveries made during due diligence 

The statement said in part; 

“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.” 

WSJ reported that the potential of Binance doing any deal with FTX is completely off.

Binance’s decision to walk out of the deal was triggered by the discoveries made when conducting due diligence on FTX. Moreover, the Binance statement highlighted that “the latest news reports regarding mishandled customer funds and alleged US agency investigations” also fueled their decision to leave the deal. Even before today, there were serious concerns about the financial health of the FTX network. 

The regulatory troubles likely to face the exchange and its CEO, Sam Bankman Fried, are also among the factors considered when making this decision. The Binance spokesperson said; 

“As regulatory frameworks are developed, and the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”  

Earlier today, Brian Armstrong, the CEO of Coinbase, commented on the FTX situation, especially about the planned exchange purchase by Binance. Mr. Armstrong highlighted that even with Binance’s support, Sam Bankman-Fried’s credibility would remain ruined.

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Wayne Jones

Wayne is an all-rounded cryptocurrency writer who has written for several publications in the fintech industry. Having graduated from the University of Essex Colchester, he developed a passion for blockchain technology and has been curious about how the blockchain can modify the traditional financial industry.