FTX fate in jeopardy after Binance backs out of acquisition

FTX fate in jeopardy after Binance backs out of acquisition

NASSAU, BAHAMAS — The fate of crypto exchange giant FTX appears murky after its major rival Binance backed out of a deal to acquire the company which has its headquarters in The Bahamas.

Binance, which a day ago revealed that it had signed a non-binding letter of intent with FTX to cover the liquidity crunch after the company had reached out for help, said in a Twitter post that “the issues are beyond our control or ability to help”.

The company added: “As a result of corporate due diligence, as well as the latest reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will no pursue the potential acquisition.”

FTX, which was founded by Sam Bankman-Fried, relocated its headquarters to The Bahamas last year and announced plans to invest around $60 million towards the development of a boutique hotel, commercial center, and its new headquarters on nearly five acres of land at Bayside Executive Park.  

FTX’s downfall has sent shockwaves through the cryptocurrency market and the fate of its plans in The Bahamas remains in doubt. Local experts however say that the company’s woes do not necessarily shed this jurisdiction in a negative light and should not impede the country’s push towards becoming a digital assets hub.

Valdez Russell, Vice President of Communications & Corporate Social Responsibility at FTX Digital Markets in response to Eyewitness News’ queries on Tuesday regarding the impact of the developments on FTX’s local operations and future, referred to Bankman-Fried’s post on Twitter.

The tweet read: “Things have come full circle, and FTX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX(pending due diligence etc.).

“Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered. 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. 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.”

Earlier this year Bankman-Fried stated that The Bahamas has become a jurisdiction to be envied having attracted FTX to its shores. The introduction of the Digital Assets and Registered Exchanges Bill is said to have played a key role in attracting the crypto giant to this jurisdiction from Hong Kong.

1 comments

I’m hoping some PLP thieves lost some good money with the implosion of FTX. Crypto is dead. No one will ever use the Bahamas as a jurisdiction for crypto, much less real money again. Good riddance.

Comments are closed.