From the announcement, Binance is not definitively buying FTX. They've agreed to discuss acquisition and do due diligence. Which means finding out how deep a hole FTX is in before proceeding.<p>As a rule of thumb, about half of announced M&A deals don't happen.<p>FTX is a licensed money transmitter in many US states. In some states they need regulatory approval for an acquisition. Binance is headquartered in the Cayman Islands. Regulatory approval will not be easy to get. US bankruptcy courts will have a say, too. FTX acquired another bankrupt crypto company just two months ago, and the bankruptcy judge in that case may have something to say about it.<p>Bloomberg has a story.[1]<p>WSJ has a story.[2]<p>This is going to be a big mess.<p>[1] <a href="https://www.bloomberg.com/news/articles/2022-11-08/crypto-exchange-binance-to-buy-rival-ftx-com-terms-undisclosed" rel="nofollow">https://www.bloomberg.com/news/articles/2022-11-08/crypto-ex...</a><p>[2] <a href="https://www.wsj.com/livecoverage/stock-market-news-today-11-08-2022/card/binance-says-it-is-buying-ftx-eSonOuzr5vQbWHsijKk8" rel="nofollow">https://www.wsj.com/livecoverage/stock-market-news-today-11-...</a>]
I don't know much about any of this, but clicking around in twitter I came across this interesting thread from only 20 hours ago, about FTX and Binance being "at war" with each other [1].<p>[1] <a href="https://twitter.com/alex_valaitis/status/1589711035132694528" rel="nofollow">https://twitter.com/alex_valaitis/status/1589711035132694528</a>
Anyone wanting to know more about what led to this whole fiasco, I would highly recommend this read: <a href="https://dirtybubblemedia.substack.com/p/is-alameda-research-insolvent" rel="nofollow">https://dirtybubblemedia.substack.com/p/is-alameda-research-...</a>
FTX was *throwing* money at everything moving in the crypto space. Where the heck did all the money go? Did they just spend VC money as long as they could and ran out now? Or did all the money disappear through the Alameda pipe? I really hope that there will be an investigation into the whole thing. Liquidity crunch my a**.
This makes the FTX acquisitions of Celsius etc extremely suspicious. FTX themselves may have been at risk of going under when three arrows went under. Clearly there was some level of dishonesty about their exposure.
Some elements of the crypto space may not need to be regulated, but centralized exchanges should be regulated as hard as banks and should regularly undergo liquidity stress tests. If FTX does turn out to be insolvent, execs should be getting more than a slap on the wrist