Binance's reversal comes less than a day after Changpeng Zhao revealed that a non-binding letter of intent had been signed to explore an acquisition.
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Binance has announced that it will no longer pursue plans to acquire FTX.
The world's biggest crypto exchange said this was in response to due diligence "as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations."
A statement from a Binance spokesperson said:
"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."
Although the exchange says the failure of major players causes retail consumers to suffer, Binance added:
"We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market."
Binance's reversal comes less than a day after Changpeng Zhao revealed that a non-binding letter of intent had been signed to explore an acquisition.
It's unclear what the U-turn will mean for FTX, its customers, or Sam Bankman-Fried.
Binance's CEO, Changpeng Zhao, later confirmed the news by tweeting:
"Sad day. Tried, but 😭"
The crypto markets slid even further on the news — with Bitcoin reaching new depths of $15,682 as investors reacted in a state of panic.
But it's FTX's FTT token that's suffering the most. It hit lows of $2 late on Wednesday — and has fallen by 42% over the past 24 hours.
Over the past seven days, it's plunged by a staggering 88.2%.
