Arab Press

بالشعب و للشعب
Sunday, Jul 06, 2025

Crypto crisis deepens with values suffering after Binance U-turns on FTX bailout

Crypto crisis deepens with values suffering after Binance U-turns on FTX bailout

Regulators and US officials are reportedly investigating as the FTX exchange teeters on the brink following a rush of withdrawals that are leaving customers facing big losses.

Bitcoin hovered just above a two-year low overnight and other cryptocurrencies suffered heavy losses as FTX teetered on the brink of collapse.

It had emerged on Wednesday that the Binance exchange had walked away from a non-binding bailout offer of smaller rival FTX - once the sector's fourth-largest exchange.

Binance said: "As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX."

FTX, whose native token FTT has lost 90% of its value this week following a surge of withdrawals, was reported by the Wall Street Journal to have told investors it needed $8bn (£7bn) to cover them.

Another exchange, OKX, said it was also approached by FTX chief Sam Bankman-Fried this week, who described liabilities of $7bn that needed covering quickly.

OKX director of financial markets, Lennix Lai, told the Reuters news agency: "Even Elon Musk would not be able to commit to a deal with $7bn liability within a few hours of negotiations.

"That was too much for us."

The latest turmoil for the sector is focusing on the unknown size of customer losses and the hit to sentiment from the latest and possibly largest collapse.


Binance CEO Changpeng Zhao pulled the plug on an offer to rescue FTX after the scale of its problems became clear.

The prospect of a top exchange failing follows the collapse of stablecoin TerraUSD and crypto hedge fund Three Arrows Capital this year.

Cryptocurrency markets nursed heavy losses on Thursday, with bitcoin attempting a recovery around the $16,700 level following a 20% dip on the week.

FTT slumped just above its record low of $1.50 but was trading just above $2.

Bankman-Fried said he was "exploring all the options" but there were no signs that any other rescue had been made available.

The US securities regulator was said by Reuters to be investigating FTX.com's handling of customer funds and crypto-lending activities while a separate report, by Bloomberg, suggested the US Department of Justice was also looking in to the turmoil.

Danny Chong, CEO of decentralised finance firm Tranchess, said the problems at FTX had wider ramifications than the sector's earlier failures.

"People's funds, including market makers', are still currently with FTX.

"Just when people were thinking that crypto winter might probably not last... along comes another episode like this."

Investors are already writing off funds ploughed into FTX.

Venture capital fund Sequoia Capital wrote down a $150m exposure to zero on Wednesday.

Canada's Ontario Teachers Pension Plan, Tiger Global and Japan's Softbank are also FTX investors.

Neil Wilson, chief markets analyst at markets.com, said the crisis was being felt more widely: "Whilst crypto isn't necessarily that big a market overall, it's certainly correlated to things like risk and liquidity and therefore it's adding to a negative feeling in the market today."
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
×