Binance, the largest crypto exchange, on Tuesday said it would buy FTX.com following a significant liquidity crunch.
In a statement on Twitter, Binance said FTX had asked for help and to protect users it has signed a non-binding letter of intent. It gave no financial details.
“We will be conducting a full DD (due diligence) in the coming days,” Binance CEO Changpeng Zhao said in the tweet.
Prices of crypto currencies were rocked in trading on Tuesday amidst mounting speculation over the financial health of FTX, which is backed by billionaire billionaire Sam Bankman-Fried.
Binance had earlier said it was offloading all of its holdings of FTX’s FTT token due to recent revelations, without being more specific .
Altogether, Binance holds about $2.1 billion in FTT following its exit from FTX equity last year.
“There is a lot to cover and will take some time,” Zhao said. “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 coming days as things develop.”