FTX logo

FTX -- which is the biggest name in crypto -- is selling the company to rival Binance in a hastily-arranged deal where the buyer is emphasizing his option to walk away.

The move comes after a short fued between the CEO's of the two companies.

"Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com," Sam Bankman Fried announced on twitter.


It initially wasn't clear what he meant because he'd put a deal on the table to buy all of Binance's FTT Tokens for $22. But those tokens have crashed today as FTX was hit with a wave of withdrawals.

FTX token

The real smoke came a few hours ago when withdrawals were halted from FTX.

Bankman Fried also wrote:

Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. -- we apologize for that.

He also offered some contrition.

A *huge* thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.

The lines about customer protection make me think there was a risk that customers weren't protected, which was the fear all along.

Binance CEO Chanpeng Zhao said this was hastily-thrown together in another sign of real trouble at FTX.com

"This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI [letter of interest], intending to fully acquire http://FTX.com and help cover the liquidity crunch. We will be conducting a full DD [due diligence] in the coming days. There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop."

What do you offer when someone asks you to buy their company "this afternoon"? $1?

This basically confirms it was a solvency issue and that is not good for crypto. Bitcoin is rallying on this but the comments about a quickly-made deal and the pending due diligence raises real issues. And you have to assume the regulators will be digging through FTX to find out if the money was there.

Bitcoin has rallied on this and -- obviously -- bitcoin is fine. There's also good news that someone else is stepping in rather than letting this get out of hand. But this could turn out to be an enormous black eye for the space.

Reminder, this was just yesterday:

SBF tweet

Also note that Bankman Fried noted that FTX.US is a separate company and isn't being sold. He noted that they're two separate companies and that FTX.US is not impacted by this. He wrote that "withdrawals are and have been live, is fully backed 1:1, and operating normally."