Cryptocurrency prices fell to a two-year low overnight after major cryptocurrency exchange Binance announced late Wednesday that it was pulling out of a proposed merger with struggling rival FTX, leaving the latter on the brink of bankruptcy.
The cryptocurrency giant’s failure could affect the world of sports and entertainment.
A number of corporations and celebrities are said to have made significant investments in the company, while FTX also has major sponsorship deals with basketball team Miami Heat and Mercedes-AMG Petronas F1 team, among others.
Binance said in a statement that it would not complete the transaction after due diligence, explaining that reports of “mishandled client funds and alleged investigations by US authorities” played a role in its decision.
News that Binance walked away from the deal sent cryptocurrency values lower, with benchmark cryptocurrency Bitcoin falling to a two-year low of $15.71 from a record high of $64.86 in November 2021.
It recovered slightly overnight and was trading at $16.29 as of 6:10 a.m. ET on Thursday.
However, the FTX token appeared to be trading in freefall as of 10:10 a.m. ET Thursday, down about 40% from the same time the previous day, and near its September 2021 high of $77.69
FTX, valued this year by retail investors at $32 billion, has taken a sudden turn in recent weeks amid growing concerns about the health of the company’s balance sheet, which in turn has sparked a panicked withdrawal of funds from investors.
Chief Executive Sam Bankman-Fried said Tuesday his company faces an $8 billion financing shortfall because of the sudden “runs” in the stock market.
It is currently unclear how this gap will now be closed and crypto experts around the world are predicting a rocky ride for the cryptocurrency markets over the coming days and weeks.
Author: Melanie Goodfellow
Source: Deadline
Kenneth Weaver is an author at “The Fashion Vibes”. He focuses on writing about celebrity-related news, keeping his readers up to date with the latest happenings in the entertainment industry. With a keen eye for detail and a passion for writing, Kenneth brings his unique perspective to every article he writes, making him a trusted source for all things celebrity.
