Because of FTX's improper handling of customer funds, among other factors, Binance on Twitter said the cryptocurrency exchange would cease the purchase plans.
The biggest cryptocurrency exchange in the world, Binance, was the initial investor in FTX.
Binance tweeted: тАЬAs a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,тАЭ
Before the cancellations, Binance had planned to help the users of the US-based cryptocurrency exchange by offering liquidity. However, the business has said that FTX's problems include тАЬbeyond our control or ability to help.тАЭ
Potential for bankruptcyя╝Я
Binance has not given specifics regarding the problems FTX is experiencing. Nevertheless, according to press sources, the crypto exchange may have found a significant discrepancy between FTX's $6 billion worth of liabilities and assets.
Additionally, according to Bloomberg, which obtained this data from a source with firsthand knowledge of the situation, FTX CEO Sam Bankman-Fried warned investors that the cryptocurrency exchange would have to declare bankruptcy if it didn't get a capital infusion.
Bankman-Fried, who was reportedly valued at $26 billion, also told them that his cryptocurrency exchange could run out of money by up to $8 billion and needs $4 billion to stay afloat.
Sam Bankman-Fried, CEO of FTX, had been acquiring failing crypto companies up until very recently due to a financial bottleneck brought on by the abrupt fall of the currencies Luna and UST or TerraUSD.
According to the individual with knowledge of the situation who spoke to Bloomberg, FTX is currently attempting to secure rescue finance in the form of either debt, equity, or a combination of both.
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