FTX’s token FTT is down over 58% in the past 24 hours to roughly $2.28. “We have decided that we will not pursue the potential acquisition of FTX.com,” Binance wrote on Twitter this Wednesday afternoon. Several businesses, including Crypto.com, Tether, Coinbase, and Genesis, have cut ties with FTX over the past day. This follows news that Binance is backing out of the planned acquisition deal. Reports of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) investigating FTX also contributed to FTT’s continued decline. “FTX going down is not good for anyone in the industry,” (CZ) Binance CEO Changpeng Zhao said. “Do not view it as a win for us.” Cryptocurrency exchange FTX’s founder said in a report that the company might be forced to declare bankruptcy if it does not receive a fresh capital infusion. If the SEC determines the assets in question to be securities, it would mean FTX may have violated U.S. exchange laws. Regulators are also looking into the relationship between FTX.us and its Caribbean parent company.
Bankman Fried informed investors that FTX is short as much as $8 billion due to a liquidity crisis. The exact number was published by The Wall Street Journal, which also mentioned that FTX requires additional funding to pay for consumer withdrawal requests. FTX needs $4 billion to stay solvent. In the midst of a liquidity crisis, Binance announced on Tuesday that it had signed a non-binding letter of intent to buy FTX.com. However, Binance announced today that it would not proceed, citing the extent of FTX’s financial issues. FTX had been one of the biggest and most well-known bitcoin exchanges, with prominent alliances with athletes, teams, and sports leagues. When the company raised an extra $1.8 billion in January, it was valued at $32 billion. Changpeng CZ instructed staff members to refrain from trading FTT, the native utility token used to obtain trading fee reductions on FTX. Zhao stated that “we need to hold ourselves to a higher standard than even in banks.” The SEC and CFTC are reportedly looking into how FTX has managed its customers’ money. Tron Network’s native TRX token momentarily surged some 4,000%, from 6 cents to $2.5, on FTX, even though it exchanged hands for 6 cents on other prominent exchanges, such as Binance and OKX. Sequoia Capital, a leading venture capital firm, has marked down the value of all its investments in FTX to zero. In total, the firm suffered a $213.5 million loss.
That’s it for today, see you tomorrow