• by Colin Kirkland , November 8, 2022

On Tuesday, Binance -- the world’s most valuable crypto exchange, estimated to be worth over $300 billion -- bought rival exchange FTX, a surprising deal that was revealed in a series of tweets. 

“Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX.com (pending DD etc.)," Sam Bankman-Fried, founder and CEO of FTX, tweeted. 

Binance CEO Changpeng Zhao confirmed the deal on Twitter. He said the two exchanges signed a non-binding letter of intent, and that a full due diligence process would be underway in the next couple of days. 

The deal comes shortly after a report by CoinDesk which raised concern that the balance sheet of Alameda Research -- FTX's corporate sibling, also founded by Bankman-Fried -- was too reliant on illiquid tokens including FTX's own FTT token that grants holders a discount on trading fees on its marketplace. 

The world’s two largest crypto exchanges have spent the past week dueling in a public spat after a months-long feud on social media between both billionaire founders. 

Earlier this week, Zhao announced that Binance was selling its holding of FTT and that the firm was liquidating its FTT holdings as “post-exit risk management,” alluding to rumors about the financial issues surrounding Bankman-Fried’s Alameda Research. 

Eventually, Zhao said his company reached its decision after FTX asked for help. “To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch,” he said in a tweet.

Bankman-Fried offered a “huge thanks” to Zhao and Binance on Tuesday, adding that the deal was “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,” Bankman-Fried added via tweet.

Several crypto tokens jumped in value after the news, seen here in a tweet by Wu Blockchain: “Affected by the news of Binance's acquisition of FTX, BNB rose to $370, an increase of 12% in one hour; FTT rose to a maximum of $22, an increase of 37% in one hour. BTC bounces back to $20,143 and ETH to $1,535.