“Who needs Netflix when you’re in the crypto space?”, one user commented on Twitter as the crypto industry tries to digest the acquisition of crypto exchange FTX by rival Binance. The deal, revealed on Nov. 8, has been compared to a “chess move” by some, hinting that Binance’s strategy intentionally led to the deal.
Users on Twitter claimed that “CZ just executed the most profitable play we have seen in the crypto space, ever, period,” referencing Binance CEO Changpeng Zhao’s series of tweets that triggered the acquisition.
CZ just executed the most gangster play we’ve seen in Crypto, ever, period. The BALLS on this man. Truly–bravo.
Also bravo to Sam to choose the correct option that protects customer assets, swallow his pride, and not burn everything down in an unnecessary fight.
WHAT A SHOW!
— Autism Capital (@AutismCapital) November 8, 2022
The community also compared the move to Elon Musk’s takeover of Twitter:
@SBF_FTX
Another slow poison implemented by @cz_binance like @elonmusk used against Twitter to acquire it.
monopoly
And we hate it.#FTX is the best exchange.— CSStart.hft (@cosmoaker) November 8, 2022
In a brief summary, in a tweet on November 6, Zhao announced that the decision to liquidate Binance’s position in FTX Token (FTT) was I take following “the recent revelations that have come to light”, citing “post-withdrawal risk management” reasons.
FTX founder and CEO Sam Bankman-Fried, or SBF, took to Twitter on Nov. 7 to claim that a competitor was trying to go after the cryptocurrency exchange with false rumors. FTX’s “assets are fine,” he said, stating that he had sufficient funds to cover all client holdings and that he does not invest client assets, not even in treasuries. In the same thread, SBF also called for collaboration with rival exchange Binance.
As Cointelegraph reported, the series of tweets triggered a sell-off of the FTX token that broke below the pattern support line near $22.50, accompanied by a spike in volume. The sell-off continued below the support line and the token is down over 57% in the last 24 hours, trading at $9.70 at press time.
In a message to FTX staff this morning, SBF said that a net $6 billion had been withdrawn from the platform in the last 72 hours, which had brought the exchange to an “effective pause”, adding that the situation would be resolved in “the near future”, according to reports.
On November 8, both SBF and CZ announced the acquisition citing a “liquidity crisis”, implying that the liquidation of Binance’s capital caused the insolvency of FTX. The FTX CEO opted to seek a “bailout from the competitor that triggered the bank run in the first place,” one Twitter user wrote about the legal options the exchange had in the face of the liquidity crisis.
1/ Ok so just processing this out loud because I am pretty mindblown that FTX chose – of all options, a buyout from Binance.
These were the options open to SBF: (a) seek emergency debt financing, (b) seek new money investment, (c) liquidate assets and/or (d) buy time…
— wassielawyer (@wassielawyer) November 8, 2022
The deal still depends on regulatory approval, and it is unclear whether antitrust issues will arise from the deal.
Binance signed a non-binding letter of intent (LOI) declaring its intention to purchase FTX. Zhao added that Binance was, “assessing the situation in real time” and had the ability to “withdraw from the agreement at any time.”
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