Leading cryptocurrency exchange Binance may rescind its FTX rescue deal, Coindesk has reported. According to the publication, it is likely to not follow through with the proposal to acquire its troubled rival firm after reviewing the books of the company.
Binance boss Changpeng Zhao announced a day ago that he had signed a letter of intent to buy FTX after the firm asked him for help owing to a "major liquidity crisis".
The deal between high-profile rivals Sam Bankman-Fried, FTX's CEO, and Zhao came as speculation about FTX's financial health snowballed into $6 billion of withdrawals in the 72 hours before Tuesday morning.
Bitcoin fell in the process to its lowest level in two years.
A nonbinding letter of intent was issued by Binance for the takeover that rocked the crypto sector on November 8. And now it seems that within hours of reviewing FTX’s books, especially loan commitments, the crypto exchange is rethinking its decision.
Although Binance is yet to comment on the status of the proposed bail-out, the odds of a retraction are high. One must also note how the market reacted to the development. Bitcoin slumped to its 2022 low of around $17,100, while Ether plunged to $1,160. As for Wall Street, the S&P 500, too, fell to its low of the day.
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