Following a series of due diligence, the world’s largest cryptocurrency exchange platform Binance has backed out of the FTX.com takeover deal 24 hours after signing a non-binding agreement to provide necessary liquidity and cushion the company to avert a Luna-like catastrophe.
According to Binance, there were reports accusing the company of financial misappropriation and also there was an alleged pending U.S. agency investigation. Therefore, despite Binance’s resolve to acquire the company and help protect whatever was left of retail investors’ funds, these revelations made that impossible at the moment, the company disclosed in a statement released on Binance’s official Twitter handle @binance.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com.
“In the beginning, 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,” Binance stated.
Commenting on cryptocurrency companies that mismanaged funds, the company explained that everyone suffers, both the industry and retail consumers.
“Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.
“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”
Bitcoin and other cryptocurrencies plunged to their lowest in over two years and expected to extend decline following this report.
Solana declined from over $31 a coin to $13 and could plunge below $5 by tomorrow 11th when over $50 million what of the coin would be available to be exchanged.