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A day after crypto exchange Binance showed interest in buying the non-U.S. assets of FTX, they decided to back out from the deal. Binance said that this decision comes as part of its corporate due diligence as some reports suggested that U.S. regulators - SEC and CFTC - have launched an investigation into FTX’s mishandling of customer’s funds.
As a result, Binance said that they decided not to pursue any potential acquisition of FTX. “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” the exchange added.
Soon as Binance called off their FTX deal, massive liquidations took place in the market. Earlier today, the Bitcoin price tanked under $16,000 hitting the lowest level in the last two years. As of press time, Bitcoin is trading 9% down at a price of $16,750.
The FTX crisis has also severely impacted the altcoin space. On Wednesday, November 8, the Ethereum (ETH) price tanked over 15% and is currently trading under $1,200 levels. All of the top ten altcoins have corrected more than 10% amid this recent scenario.
Binance said that it is the retail players that suffer the most as a major player in the crypto industry fails. The crypto exchange, however, believes that with more regulatory frameworks in place and greater decentralization, the ecosystem will continue to grow.
The recent FTX crisis has also caught the attention of the lawmakers in the U.S. On Wednesday, Senator Elizabeth Warren tweeted: “The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I'm going to keep pushing @SECGovto enforce the law to protect consumers and financial stability”.
However, Coinbase CEO Brian Armstrong was quick to respond adding that FTX.com was an off-shore exchange not regulated by the SEC. He also blamed the SEC for the lack of regulatory clarity in the U.S. Armstrong added that this is why many American crypto investors have moved to offshore exchanges. “Punishing US companies for this makes no sense,” he added.
As FTX is in desperate search of investors, it chief Sam Bankman-Fried has not given up yet. In a message to FTX employees, he said that he is exploring all options to come out this mess. “I'm working, as quickly as I can, on next steps here. I wish I could give you all more clarity than I can,” added SBF.
SBF also added that his immediate goals involve protecting FTX’s customers as well as its staff and investors. He further wrote: “I'll keep fighting for those (goals), as best as I can, as long as it's correct for me to. I'm exploring all the options. I'm deeply sorry that we got into this place, and for my role in it. That’s on me, and me alone, and it sucks, and I'm sorry, not that it makes it any better.”