In the last two days, the story has continued. First, FTT marked a notable collapse, Bankman-Fried stated that the financial situation of FTX is supposedly stable and the exchange itself is not threatened. However, yesterday the head of the trading platform posted a stunning news: it turns out that the FTX has financial problems, and serious ones. So serious, in fact, that Bancman-Fried has even "accepted help" from Zhao with liquidity arrangements. In simple terms - Binance may buy FTX. But why exactly "may"? We tell you.

Cryptocurrency exchange rate situation today

Why buy the FTX crypto exchange

Let’s start with an overview of the market situation. The value of FTT fell below $5, reaching a local level of $3.12. As a result, the token delivered a 74 per cent drop in 24 hours and an 82 per cent drop in a week. Here’s the relevant chart of the coin over the past seven days.

FTT exchange rate chart for the past week

The Binance BNB exchange’s native token, on the other hand, only slipped 6 per cent over a 24-hour period. Moreover, the cryptocurrency exchange rate managed to give a noticeable rise after the release of the relevant news, which was eventually reversed.

Chart of the BNB exchange rate over the past week

The flurry of news also led to instability on the BTC chart. The value of the major cryptocurrency first jumped sharply and then collapsed. Bitcoin’s local low was $17,166 – a new low for the rate in this bear market.

A 15-minute chart of the Bitcoin exchange rate

Back to the events themselves. On November 8, Sam Bunkman-Fried posted a tweet tweeting that his team had “come to an agreement on a strategic transaction” with Binance. Here’s the relevant rejoinder from the entrepreneur, cited by The Block.

Our teams are working on eliminating the withdrawal backlog. This will eliminate the liquidity gap; all assets will be covered 1:1. This is one of the main reasons why we have asked Binance to step in. It may take some time to settle and so on. We do apologise.


It's important to explain the details of what's going on here. FTX has not essentially become insolvent, but it has had liquidity problems. This means that the platform did not have enough money to provide all the user withdrawals. There were quite a few of them, by the way. According to sources, we are talking about the equivalent of $6 billion in the last 72 hours.

Why didn't the platform have any money then, since it essentially just stores users' crypto assets? The fact is that FTX used its own users' money to trade, with the FTT platform's native token being used as collateral for trades. Which means the coins were in positions, and there simply wasn't enough to provide liquidity.


A couple of hours earlier FTX had suspended user withdrawals without explanation. Prior to that, the exchange urgently imposed a cap of thousands of dollars on crypto withdrawals at a time.

Withdrawals from FTX suspended

And here’s a comment from Zhao on what’s going on. Cointelegraph cites the quote.

FTX reached out to us for help this afternoon. There is a significant liquidity crisis here. To protect users, we have signed a letter of intent involving a full acquisition of FTX.com. We will conduct a full due diligence process in the coming days.

Zhao’s tweet

Herein lies the major nuance - Binance management has signed a letter of intent, also known as Letter of Intent or LOI. This document is created to formally declare the intent of the transaction, but a party can withdraw from the process at any time. The signing of the LOI does not yet oblige Binance to buy FTX. In fact, that's partly why the market's rise in response to Binance's willingness to buy the exchange was followed by a collapse.

Zhao hinted at this in the following tweet.

Binance has the right to back out of the deal at any time. We expect FTT to be very volatile in the coming days.

What do we have in the end? One of the aims of this announcement was to ensure the safety of FTX users whose funds are stuck on the exchange. Binance, on the other hand, is supposed to help Sam and his companies solve the problem. Obviously, for Sam himself, this is a heavy blow to his reputation and the loss of his trading platform at the same time.

Incidentally, the cryptocurrency community has already started making the first memes with the head of FTX – he is being put on a par with such “successful” community members as the head of bankrupt Three Arrows Capital fund Soo Joo and Do Kwon, the creator of Terra project.

The first Sam memes

That said, Zhao only gets the upside either way. The benefit of the deal for him can now be calculated using the following formula: total debt to FTX clients + any other liabilities divided by the total number of active FTX users. This is a simplified formula for the price of each new user for the Binance ecosystem.

If these new clients bring in more revenue in the form of commissions and other transactions, Zhao may well agree to the deal. Otherwise, it is simply not profitable for him to buy the exchange. Another scenario is that FTX is left on the dustbin of history and its customers simply move on to other platforms, with Binance trying to take most of it for itself through advertising campaign funding.


Separately, it should be noted that what is happening does not concern the American division of the exchange FTX. It operates separately in this market.


CEO of Binance Changpen Zhao


We believe this event should be a clear lesson for users of digital assets. Obviously, it is not a good idea to keep all your coins on centralised exchanges, no matter how confidently their management claims there are no problems. It is also dangerous to bet on a single ecosystem - in this case Solana, which logically suffers because of the situation with the FTX platform.

However, a positive in what is happening can also be found. There is a view that such events are simply necessary to finally end the bear market that has been going on for almost a year. In addition, a move away from trading with user funds on the part of exchanges will also benefit the industry going forward.


The victims remain active FTX users and all those who lost money in trading yesterday. Such events in crypto history happen every couple of years and change the global trend. To be prepared for different situations in the market, join our Millionaire Crypto Chat.