protos.com
Binance and FTX have just announced that, pending due diligence, Binance will be acquiring FTX in order to help with a “liquidity crunch”.
Neither FTX nor Binance have provided an explanation for how an exchange which should always have full assets to cover user deposits experienced a liquidity crisis. However, Protos has been unable to locate cold wallets for certain FTX assets including Ethereum.
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 https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022
Earlier today, FTX stopped processing withdrawals of ERC-20 tokens, Solana, and Tron. It was recently reported that Alameda Research’s balance sheet was disproportionately weighted towards an over-valued FTX Token (FTT) position, which led to Binance reconsidering its ownership of FTT and announcing it intended to liquidate its position.
This led to Caroline Ellison, CEO of Alameda Research, announcing it would purchase the FTT from Binance for $22. However, this level was blown through overnight — FTT is worth $14.59 at time of writing. The market cap has fallen over $1 billion in the last 24 hours.
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