“Beyond our ability to help”

A day after Binance announced its intention to acquire rival FTX for an undisclosed sum, the company pulled out of the deal.

“Our hope was to be able to support FTX customers in providing liquidity, but the issues are beyond our control or ability to assist,” Binance said in a statement, which was first reported by Wall Street Journal and tweeted a few minutes later.

When Binance CEO Changpeng Zhao announced the deal on Tuesday, he warned that it would be pending until the due diligence process was completed.

In a letter sent to Binance employees on Wednesday morning — and shared on Twitter — Zhao emphasized that the deal had not yet been finalized. In between, he asked Binance employees not to trade FTTthe native utility token used to receive trading fee discounts on FTX.

“Just off the call with SBF yesterday, I asked our team to stop selling as an organization,” he wrote. “Yes, we have a bag. But that’s okay. Most importantly, we have to hold ourselves to a higher standard than even the banks.”

The FTT token fell as low as $2.57 in the past day, although it experienced a brief spike immediately following news of the pending deal, according to CoinGecko data. Meanwhile, Binance Coin (BNB), FTT’s counterpart on Binance’s exchange, jumped 10% to $368.07 on news of the pending deal. By Wednesday afternoon, BNB was trading at $288.91, down 20% from the previous day.

Back in the day, some companies have done it distanced themselves from FTXincluding Crypto.com, Rope, Coinbaseand Genesis.

If the deal had gone through, it would have combined the two largest centralized crypto exchanges in the industry. As of Wednesday, Binance accounted for $49 billion and FTX for $4 billion worth of trading volume in the past day — or about a quarter of all cryptocurrency trading volume, according to Coingecko.

The relationship between the two CEOs and their respective companies began years ago.

Binance was an early investor in FTX in 2019. But last July, Binance faced increased pressure from regulators and FTX bought Binance’s shares. “I think there are some differences between how we run our businesses,” Bankman-Fried said. Decryption at that time.

Meanwhile, Zhao said Forbes that Binance divested its equity in FTX was part of a “normal investment cycle” that ended amicably. “We’re still friends, but we no longer have any equality in the relationship,” she said.

Binance CZ asks employees not to trade FTT while the FTX deal is pending

The relationship analogy resurfaced on Sunday, as Zhao explained on Twitter because Binance, after exiting its position last year, decided to liquidate its FFT. This time, the tone was more combative.

“We’ve been supportive before, but we won’t pretend to make love after the divorce,” she wrote. “We are not against anyone. But we will not support people pushing against other industry players behind their backs.”

On-chain data showed that Binance had already moved $584 million worth of FTS on Saturday as part of its plans to liquidate its holdings.

This caused the price of FTT to drop. For a few days, Bankman-Fried and his team maintained that all was well. Then on Tuesday, Zhao and Bankman-Fried shocked the industry by announcing plans for Binance to acquire FTX.

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