On Tuesday, Binance CEO Changpeng Zhao (also known as CZ) announced that he signed a non-binding agreement to buy Bankman-Fried's FTX to help with "liquidity crunch."
The move is a surprising development in the strained relations between two key cryptocurrency figures. In July 2021, Binance, which had previously invested in FTX, announced its exit from the company.
Several month of clashes on the Internet escalated in a CZ's decision to liquidate its holdings of FTT, FTX's token, last week. It was made amid the reports by CoinDesk on Alameda Research, Bankman-Fried's trading house, which has strong ties with FTT.
The amount of withdrawals following this news was that big that FTX, which was bailing out many players just this summer, was in need of bailing out itself.
Investors were left uneasy by the anounced deal between Binance and FTX. Although the provisions of the deal are not disclosed, they are unlikely to be great for FTX. Having lost faith in FTX, investors crashed the FTT token from $25,47 earlier on Tuesday to as low as $2,51.
The deal sent shockwaves all over the crypto market, with other companies suffering from sliding to significantly lower numbers.
As FTX will be added to the fortune of CZ, the wealthiest person in the crypto market, the net worth of Bankman-Fried is expected to shrink by 94%. Bloomberg calls it the biggest one-day collapse ever recorded.
Bankman-Fried sent "huge thanks" to CZ, while the deal is likely to be scrutinised by regulatory authorities.