Binance has agreed to buy rival cryptocurrency exchange FTX amid a shocking and unexpected liquidity crisis at the organization run by Sam Bankman-Fried.
The deal, which was announced on Twitter, brings together two of the largest cryptocurrency exchanges in the world.
Earlier this year, FTX was valued at $32 billion U.S., while Binance is the largest cryptocurrency exchange by trading volume.
Financial terms of the transaction between the two privately held companies were not disclosed. FTX's U.S. division, which is a separate entity known as FTX U.S., is not included in the sale.
Binance CEO Changpeng "CZ" Zhao said on Twitter that the two crypto exchanges signed a non-binding letter of intent. Zhao added that a due diligence process would be undertaken in the coming days.
The sale of FTX comes amid a massive liquidity crisis at the cryptocurrency exchange that was triggered by concerns that the balance sheet of FTX's corporate sibling, Alameda Research, was too heavily reliant on FTX's own FTT digital token.
Both FTX and Alameda were founded and are owned by Sam Bankman-Fried, who was widely seen as a leader in the global cryptocurrency sector.
Investors began pulling their money out of FTX on concerns that Alameda's finances, and maybe FTX's, were not as secure as they had thought.
Last weekend (November 6), Binance's Zhao announced that he planned to sell his holdings of FTX's FTT token, prompting more investors to pull money out of FTX. The value of the FTT token has since plunged more than 80%.
The net worth of Sam Bankman-Fried is estimated to have declined by nearly $15 billion in the last day, making it among the largest collapses of personal wealth ever.
