Binance CEO CZ tweeted that FTX asked for Binance’s help during a “significant liquidity crunch.”
There is a lot to cover and will take some time. This is a highly dynamic situation, and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time. We expect FTT to be highly volatile in the coming days as things develop.
Sam has assured his followers that “customers are protected.”
According to a report by Reuters, the staff at FTX received a letter from Sam on Tuesday morning noting that the exchange saw around $6 billion in withdrawals in the last 72 hours.
In this letter seen by Reuters, Sam wrote: "On an average day, we have tens of millions of dollars of net in/outflows. Things were mostly average until this weekend, a few days ago. In the last 72 hours, we've had roughly $6b of net withdrawals from FTX." He added that withdrawals from FTX.com are "effectively paused" and that there was no "definitive answer" for the details of the deal.
Sam's tweet thread also noted that FTX.us and Binance.us are separate entities that will not be affected by either the liquidity issues or an acquisition.
CZ tweeted over the weekend that Binance intended to liquidate all of their FTT. The exchange had previously had a minority stake in FTX, but had received $2.1 billion in BUSD and FTT tokens after exiting the investment last year.
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
In response, Alameda Research CEO Caroline Ellison had tweeted an offer to buy all of Binance FTT, and noted that the Coindesk story concerning Alameda's balance sheet information did not take into account over an additional $10 billion in assets.
"If you're looking to minimize the market impact on your FTT sales, Alameda will happily buy it all from you today at $22!"
In today's tweet thread concerning Binance's potential acquisition, Sam wrote:
I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.
However, Crypto Twitter has noted that this friendly rhetoric comes just one day after Sam had tweeted:
A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine.
As of 1:45pm EST, Binance token BNB is up 4% on the week. FTT is currently down around 66%.
Crypto Twitter has been reacting in real time.
This is one of the most insane days in crypto I can remember.
This story will be updated as more information is made available.