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Business Maverick: Cryptocurrencies plunge as doubts about FTX-Binance deal grow

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Cryptocurrencies tumbled anew as news around Binance’s potential takeover of rival exchange FTX started to sink in and renewed trader concerns that there is trouble brewing within the industry and among some of its top players.

Binance CEO Changpeng “CZ” Zhao stunned the crypto world on Tuesday with an announcement that his firm was moving to take over rival FTX.com, whichwas seeing a liquidity crunch. Market-watchers linked the jitters to a Zhao tweet that the letter of intent between the two parties was nonbinding.

FTT, the utility token of crypto exchange giant FTX, collapsed by more than 75% to around $4.70 as of lat afternoon in New York,“It’s definitely having to do with a renewal of this crisis that’s being created by FTX, a renewed solvency crisis,” said Strahinja Savic, head of data and analytics at FRNT Financial. “And we still don’t know if this thing with FTX is over and how it will end.”

Terms of the emergency buyout were scant, with Binance saying the agreement came after “a significant liquidity crunch” befell FTX and the firm asked for its help. “SBF and FTX were the biggest patrons of solana. This era is over. Binance has taken over, and they will heavily favour the BNB chain over Solana. Alameda had about $1-billion in locked and unlocked $SOL which they’ll have to sell if insolvent. This puts a huge sell pressure on $SOL.” said Teng Yan, a researcher at digital-asset research firm Delphi Digital, on Twitter.

 

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