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Crypto Update: Crypto investors rattled as Binance is reportedly abandoning its proposed acquisition of rival FTX

Binance, the world’s largest crypto exchange, is reportedly abandoning its proposed acquisition of the non-U.S. assets of rival FTX, amid the latter’s liquidity crunch.

“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” a Binance spokesperson told the Wall Street Journal.

Executives at Binance have found a gap, likely in billions and possibly more than $6 billion, between the liabilities and assets of FTX, Bloomberg reported Wednesday, citing an anonymous source familiar with the matter. 

Representatives at Binance and FTX didn’t immediately respond to a request seeking comments.

On Tuesday, Changpeng Zhao, Binance’s chief executive, said the exchange had signed a letter of intent to acquire, a separate entity from FTX.US, after FTX “asked for help.”

Read: Bitcoin falls to two-year low after crypto exchange Binance proposed to buy rival FTX

FTX is the third largest crypto exchange by trading volume, according to CoinMarketCap. 

Investors are worried about any contagion, as concerns over FTX’s solvency spilled over to the already battered crypto market. Bitcoin

plunged Wednesday to as low as $16,863, the lowest level since November 2020.

Also read: Crypto billionaire Sam Bankman-Fried’s net worth could shrink by over $13 billion

See also: FTX problems mean big headaches for its private equity investors

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