The founder and CEO of cryptocurrency exchange company Binance, Chinese-Canadian Changpeng Zhao attends the opening night of the 2022 Web Summit in Lisbon, Portugal, on November 1. Photo by Miguel Lopez/EPA-EFE
Nov. 8 (UPI) -- Binance, the world's largest cryptocurrency exchange, said it reached a deal to buy one of its biggest rivals, FTX, amid fears that the crypto industry could be entering another meltdown.
If the deal is finalized, it would make Binance one of the most powerful figures in the loosely regulated crypto industry. The deal comes as fears mount that cryptocurrencies are heading for another downturn.
The merger would affect only its non-U.S. businesses and FTX will continue to operate independently of Binance. Only the Coinbase Exchange stands between Binance and FTX as the top crypto exchanges in the world.
"This afternoon, FTX asked for our help," Changpeng Zhao, founder of Binance said in a Twitter post on Tuesday. "There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire [FTX] and help cover the liquidity crunch. We will be conducting a full DD in the coming days."
FTX founder and CEO Sam Bankman-Fried confirmed the agreement in his own social media statement.
"Things have come full circle, and [FTX] first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX," he said on Twitter.
The announcement comes just days after Binance announced that hackers stole 2 million Binance BNB cryptocurrency tokens -- worth roughly $570 million -- from the BNB Chain. Chao said then that the issue was "contained now" and users' funds "are safe."
Also on Tuesday, FTX stopped withdrawals from its platform after concerned investors attempted to pull their funds all at once.