Cryptocurrency prices fell across the board in Thursday morning trading in Asia as Binance Global Inc., the world’s biggest crypto exchange, said it was backing out of a deal to acquire struggling rival exchange FTX.com just 24 hours after making the offer, leaving FTX facing collapse if no other buyers emerge.
Binance tweeted on Thursday morning as a “result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.”
Bitcoin fell to a two-year low of US$15,682 before recovering to US$16,145 as of 10 a.m. in Hong Kong, down 12% in the last 24 hours, according to CoinMarketCap. Ether fell 14% to US$1,135, its lowest since June.
The native token of the blockchain operated by Binance, BNB, didn’t escape the slump, falling 16.6% to US$271.43, the lowest since July.
Solana was the hardest hit of the major tokens, falling 42% to US$13.54, wiping several billion dollars off its market capitalization and sliding three spots to 14 in CoinMarketCap’s list of cryptocurrencies by market cap. It started the week in the top ten.
Solana, the once fourth-ranked token by market cap, was hit particularly hard as FTX’s brokerage arm Alameda Research sold large quantities of its cryptocurrency reserves — much of which was Solana — to try to contain the collapse of the FTX token FTT.
To little avail, however, as FTT plunged 57.3% to US$2.52 in the past 24 hours and over 90% in the past 48 hours from US$22 before questions about FTX’s finances hit the market.
The price plunge was greased by a series of tweets Binance chief executive officer Changpeng Zhao sent on Sunday announcing Binance was selling its FTT holdings citing “recent revelations” about FTX.
“The 2008 Global Financial Crisis saw many companies who were over exposed with leverage become unstuck and unfortunately, we have seen another example of this today,” said Anna Clive, chief operating officer of Australian crypto exchange BTC Markets Pty Ltd, in shared commentary with Forkast.
“It’s a sad time for the industry and yesterday’s events clearly articulate the need for regulatory clarity in our space,” Clive added.
U.S. Senator Cynthia Lummis, who introduced a bill aimed at regulating cryptocurrency this year, alluded to the need for clearer rules in a statement on Wednesday prior to Binance pulling out of the deal.
“The recent events that have transpired between FTX and Binance are the clearest example yet of why we need clear rules of the road for digital asset exchanges in the United States,” she said.
“Market manipulation, lending activity, and whether customer funds and assets were appropriately safeguarded are just a few of the many issues my colleagues and I need to consider in the coming days.”
Source by forkast.news