Binance announced plans to acquire its major rival FTX, shocking the crypto community.

Binance, the world's largest cryptocurrency exchange, is in the process of acquiring FTX, one of its main competitors. Because of FTX's market position, most crypto enthusiasts are taken aback by this latest development.

Binance CEO Changpeng Zhao announced yesterday that the company had signed a letter of intent (LOI) with FTX to acquire the crypto exchange and assume its liabilities.

Timo Lehes, co-founder of Swarm, a regulated DeFi platform, told Coinjournal that Binance's current status means it is now "too big to fail." Leches stated;

"With this level of consolidation, Binance is too big to fail." Their success is now critical to the crypto industry's systemic operations, as both exchanges handle more than half of global spot trades and a large portion of crypto derivatives business. Binance has made no secret of its desire to expand its regulatory footprint, and the FTX acquisition furthers that goal.

"The timing of the transaction is intriguing because it comes less than 24 hours after Binance withdrew its liquidity from FTX." The last 24 hours have highlighted the lack of transparency as a centralised phenomenon. Those monitoring on-chain activity were the ones who noticed unusual activity with FTX wallets, sparking the rumour mill on Twitter and putting pressure on the FTX team to provide answers. If there had been more transparency and less confusion surrounding FTX's operations, perhaps there would have been less FUD and SBF and his team would have been in a better position. If the deal goes through, it will be an unprecedented consolidation in the crypto space — ironically, one that values decentralisation and transparency."

The chain of events started when Binance's CEO announced that the exchange would liquidate its entire position in FTT tokens. Binance holds $584 million in FTT tokens and has decided to sell them in the open market over the next few months, rejecting Alameda Research's offer to sell them.

Sam Bankman-Fried, the founder of FTX, owns Alameda Research, a hedge fund. CZ argued that it needed to sell its stake in FTT to avoid a repeat of the situation it faced with LUNA earlier this year.

This caused a panic, with traders and investors attempting to withdraw funds from FTX. Yesterday, FTX had to pause withdrawals on its platform in order to facilitate customer withdrawals and maintain confidence.

Binance and FTX eventually reached an agreement in which Binance will acquire the latter and assume its liabilities. Binance is now far ahead of the other cryptocurrencies, making it the undisputed leader in the crypto space.

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