Binance’s victory over FTX means more users moving away from centralized exchanges
Based on the joint statements on Twitter this week from Binance CEO Changpeng “CZ” Zhao and FTX CEO Sam “SBF” Bankman-Fried, it seems clear that FTX has serious solvency problems — so dire that few in the market are willing to save it. As a result, FTX is turning to CZ as a prospective buyer.
After CZ exposed FTX’s problems earlier in the week by announcing his plan to dump $500 million of its FTX Token (FTT) on the market, the companies said on Nov. 8 that they had entered into a nonbinding agreement for Binance to purchase FTX. It’s a tentative deal that means Binance can withdraw at any time without facing any consequences, and I personally believe it is very unlikely the acquisition will ultimately be finalized.
While SBF is the sixth-largest individual political contributor in the United States — he gave a total of $39.8 million to the Democratic Party over the past year — it’s worth noting that the cash didn’t get FTX a license to operate in the United States. Owning FTX wouldn’t gain Binance any access to the market beyond what it already enjoys.
From a market share and platform standpoint, FTX does not offer any unique value to Binance (as a company like Twitter might). For all the business units that FTX offers, Binance has competitors of equal or even greater quality, including spot and derivatives trading platforms, staking products, and the ecosystem of startups building on its platforms. (That could extend to include Solana, where FTX-funded startups compete with those on Binance's BNB chain.) Binance will naturally win FTX’s clientele in the event that FTX fails, regardless of whether they make any deal.
The nonbinding agreement includes a due diligence period, which gives SBF a bit of breathing room to find
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