The crypto world was rocked on Tuesday when one of the largest crypto exchange FTX got on the verge of collapse and is waiting for a bail out by its major rival Binance.
According to Binance, it has reached on agreement to buy FTX which is its competitor. FTX struggled to meet a surge of withdrawals in recent days.
The size of FTX acquisition by Binance is not identified yet but at one point FTX was worth around $32 billion.
According to a report, the emergency deal highlighted the persistent instability of the crypto market which was hit with this spring crash of $2 Trillion draining savings of many amateur investors.
The downturn has distabilized some of the big crypto companies but FTX is by far the largest casualty.
For those who didn't know, FTX was widely regarded as one of the best run crypto companies until its finances started untangling virtually overnight.
In terms of the deal getting finalized, it will unite two of the largest crypto exchanges and making Chengpeng Zhao status stronger in the crypto industry.
Reports had been circulating that FTX relied on unstable financial foundations. Many of the FTX customers rushed in to take their assets out.
According to the Block, a crypto research firm, at one point on Tuesday, FTX stopped withdrawals altogether. The exchange looked to have entered liquidity crunch, meaning that the exchange lacked funds in meeting withdrawal demands.
Cheif Executive of FTX, Sam Bankman Fried apologized to FTX employees in an internal note by not being communicative recently and said the company faced net withdrawals of roughly $6 billion in previous 72 hours compared with tens of millions of dollars in inflows and outflows on a typical day.
We have seen many renowned crypto projects crashing this time in bears but the happening with FTX by far look like the biggest casualty.
Any thoughts?