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Misuse of customer’s funds, US probe push Binance to end FTX acquisition deal

Days after announcing that his company, Binance, was planning to acquire cryptocurrency exchange, FTX.com, Zhao Changpeng, has pulled out of the deal.

Ripples Nigeria had reported that the largest crypto exchange in the world wants to buy FTX from its founder, Sam Bankman-Fried at an undisclosed amount.

Both founders disclosed the acquisition talks on Twitter, a statement that shocked the industry, and meant to aid FTX financially.

However, Binance, on Thursday, said it is no longer going forward with the deal due to various factors discovered during due diligence and beyond its control.

READ ALSO:FTX’s Bankman-Fried accepts Binance’s acquisition deal after Elon Musk’s rejection

Binance explained that reports of mishandling customer funds and alleged US agency investigations caused the deal to fall through, and won’t be able to offer liquidity to FTX customers as hoped.

Although, Changpeng had previously stated that his company could pull out of the deal as the acquisition talks was based on a non-binding agreement.

The statement released by Binance reads, “As 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

“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.

“Every time a major player in an industry fails, retail consumers will suffer. 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.

“As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”

Source: Ripples Nigeria

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