Crypto exchange Binance to acquire rival FTX
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Binance has signed a letter of intent to acquire FTX.com, the exchange associated with Sam Bankman-Fried, according to tweets from CEOs of both companies.
Why it matters: Binance is the largest exchange by volume in the world. FTX is the fourth largest. It's acquiring a fast-growing rival amidst a wider downturn in the crypto market.
- FTX, which has raised around $2 billion in venture capital funding, as of noon had not yet communicated with its own investors about the Binance sale, multiple sources tell Axios.
The big picture: FTX had taken a significant leadership role in the U.S. blockchain industry as it aggressively sought regulations that would provide the industry with regulatory clarity in its largest market.
- Its young CEO, Sam Bankman-Fried, has become one of the industry's most recognized faces.
- Binance has been around the crypto industry for a long time, but FTX's growth has been absolutely explosive, allowing it to quickly rival the market leader.
What they're saying: "This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full [due diligence] in the coming days," Binance CEO Changpeng Zhao (better known as CZ) tweeted this morning.
Of note: Both companies have separate companies set up to serve U.S. customers. FTX-US will not be impacted by this deal, according to a separate tweet from Bankman-Fried.
- Neither company immediately responded to a request for comment.
Go deeper: Listen to Dan Primack, Crystal Kim and Brady Dale discuss more on Twitter Spaces.
