Changpeng "CZ" Zhao walked away from his bailout for Sam Bankman-Fried's
"Our hope was to be able to support FTX's customers to provide liquidity, but the issues are beyond our control or ability to help," Binance, the crypto exchange founded by Zhao, said in a statement.
An FTX spokesperson declined to comment.
It became evident in a matter of hours that rescuing FTX would be a tall order for Binance. Its executives found themselves staring into a financial black hole — a gap between liabilities and assets at FTX that's probably in the billions, and possibly more than $6 billion, according to a person familiar with the matter.
On top of that, U.S. regulators are circling FTX, investigating whether the firm properly handled customer funds, as well as its relationship with other parts of Bankman-Fried's crypto empire, including his trading house Alameda Research, Bloomberg News reported Wednesday.
Zhao himself admitted there was no
"As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of
For crypto investors, the stakes are high for what happens next. The downfall of Bankman-Fried, the industry's onetime 30-year-old wunderkind, has cast doubt about which institutions are safe in the still loosely regulated market.
While Bankman-Fried is
Coinbase Chief Executive Brian Armstrong said Tuesday in a Bloomberg TV interview that if the deal with Binance fell through, it would likely mean FTX customers would take losses.
"That's a not a good thing for anybody," he said.
— With assistance from Lydia Beyoud, Tom Maloney and Suvashree Ghosh.
