On Tuesday, FTX signed a bailout deal with bigger rival Binance after a surge in withdrawals triggered a “significant liquidity crunch.”
Concerns about FTX’s financial health reportedly caused him to withdraw $6 billion (£5.2 billion) in just three days.
Binance has said it has agreed to purchase FTX’s non-U.S. entity pending due diligence.
FTX founder Sam Bankman-Fried and his Binance CEO Changpeng “CZ” Zhao are the most powerful and high-profile rivals in the cryptocurrency market.
Some of the pressure on FTX came from Zhao. Zhao tweeted on Sunday that Binance is selling its holdings of the FTX digital token known as FTT.
“Due to recent facts that have come to light, we have decided to liquidate the remaining FTT on our books,” he said. FTT has lost almost 80% of its value this week.
On Tuesday, Zhao tweeted, “This afternoon FTX asked for our help. There is a serious liquidity crisis.” Binance has signed a letter of intent to acquire the company, but said it has “the discretion to exit the business at any time.”
Bankman-Fried also said on his Twitter: This results in a loss of liquidity. All assets are covered with his 1:1. “
“The most important thing is that our customers are protected … we are doing our best,” he added.
Bankman-Fried also said FTX’s U.S. operations are separate companies and “are not impacted at this time.”
