WASHINGTON: Crypto giant Binance signed a nonbinding agreement to buy rival FTX’s non-US unit, FTX.com, to help cover a “liquidity crunch” at the cryptocurrency exchange, the companies said on Tuesday, in a surprise move that raised fresh concerns about the risks investors face in the volatile crypto market.

Binance CEO Changpeng Zhao tweeted that FTX, run by billionaire Sam Bankman-Fried, had “asked for our help” after “a significant liquidity crunch.”

He said Binance will be conducting due diligence in the coming days as the next step toward an acquisition of FTX.com. The US operations of Binance and FTX are not part of the deal, Bankman-Fried said in a separate tweet. The deal comes after the in-house token of crypto exchange FTX slumped, losing one-third of its value and dragging down other major digital assets, amid talk of pressure on FTX’s financials.

Binance is currently under investigation by the US Justice Department into possible violations of money-laundering rules.

Published in Dawn, November 9th, 2022