Binance gears up to buy FTX following a liquidity crisis

Binance has signed a non-binding letter of intent to acquire its rival FTX for an undisclosed sum following a liquidity crisis

Binance has signed a non-binding letter of intent to acquire its rival FTX for an undisclosed sum following a liquidity crisis. The deal was revealed in a series of Twitter posts but the financial terms of the transaction were not disclosed.

What we do know is that Binance was the first investor in FTX and it will now be the last as well, while FTX's US division, a separate entity known as FTX US, is not included in the deal. According to officials from both entities, a full due diligence process would be underway in the next couple of days. The acquisition news follows an article from industry experts that voiced some concerns about the balance sheet of FTX's corporate relative, Alameda Research.

According to CoinDesk, Alameda Research was too heavily reliant on illiquid tokens including FTX's own FTT. Not too long after, Binance officials announced that they planned to sell holdings of FTX's FTT token, which pushed down the price of FTT. Regarding the acquisition, FTX officials thanked Binance and emphasised that this is a user-centric development that benefits the entire industry.

What has Binance been up to lately? In August 2022,  Binance and Mastercard have launched a new prepaid rewards card in Argentina that supports both Bitcoin and BNB. Issued by Credencial Payments, the Binance Card will allow new and existing users in Argentina with a valid national ID to make daily purchases and perform financial operations such as bill payments using cryptocurrencies. According to company officials cited by prnewswire.

com, Mastercard hopes to bring millions of additional users into crypto and other digital assets. The crypto payments sector has room to grow, and the Binance Card aims to encourage wider crypto use around the globe. In September 2022, Binance has partnered the Nigeria Export Processing Zones Authority (NEPZA) to create a virtual free zone for blockchain development.

The NEPZA revealed that preliminary meetings with Binance had taken place to create the virtual free zone, which would be the first of its kind in West Africa. In October 2022, Binance joined US-based fintech Inswitch to launch on-off ramp services in the context of rising cryptocurrency adoption in Latin America. On-ramp services for fiat money to cryptocurrency allow the exchange of fiat currencies into cryptocurrencies such as Bitcoin and Ethereum.

The on-off ramp services provided by Binance and Inswitch will pair up with important payment methods, banks and local currencies in over 10 countries in LATAM. This will allow users to convert fiat currencies and digital assets with their Binance wallets. .

Nov 09, 2022 15:02
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