Binance, the world’s largest crypto exchange, is reportedly unlikely to follow through with its proposed acquisition of the non-U.S. assets of rival FTX, amid the latter’s liquidity crunch.
After about half of a day of reviewing FTX’s internal data and loan commitments n Binance is leaning towards abandoning the deal, according to CoinDesk. Executives at Binance have found a gap, likely in billions and possibly more than $6 billion, between the liabilities and assets of FTX, Bloomberg reported, citing an anonymous source familiar with the matter.
“We’re just 36 hours into the due diligence process,” a Binance spokesperson wrote to MarketWatch via email. “Once we have completed that, we will make a decision based on what’s in the best interest of Binance’s users across the globe.”
On Tuesday, Changpeng Zhao, Binance’s chief executive, said the exchange had signed a letter of intent to acquire FTX.com, a separate entity from FTX.US, after FTX “asked for help.”
Read: Bitcoin falls to two-year low after crypto exchange Binance proposed to buy rival FTX
FTX is the third largest crypto exchange by trading volume, according to CoinMarketCap.
Investors are worried about any contagion, as concerns over FTX’s solvency spilled over to the already battered crypto market. Bitcoin
BTCUSD,
plunged 16% Wednesday to as low as $16,863, the lowest level since November 2020.
Also read: Crypto billionaire Sam Bankman-Fried’s net worth could shrink by over $13 billion
See also: FTX problems mean big headaches for its private equity investors
