Just over an hour ago, Changpeng Zhao (CZ), the CEO of Binance, announced that he was acquiring FTX.com, the non-US arm of cryptocurrency exchange FTX. It follows a series of liquidations on the FTX exchange since Sunday. It was then that CZ announced Binance’s plans to sell its holdings of the FTX token, FTT, and cited lessons learned from LUNA, the token crash that caused the crash in May.

CZ wrote on Twitter: “This afternoon, FTX requested our help. There is a major liquidity crisis. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crisis. We will conduct a full DD (due diligence) in the coming days.”

The transaction is for the international arm of FTX, not FTX.us, which, according to FTX CEO Bankman-Fried, is operating as normal.

“The important thing is that customers are protected,” wrote Sam Bankman-Fried, CEO of FTX.

“I know there have been rumors in the media of conflict between our two exchanges, however, Binance has shown time and time again that they are committed to a more decentralized global economy while working to improve the industry’s relationships with regulators. We are in the best hands.”

However, yesterday’s diplomatic Tweets from each CEO were followed by individual Tweets indicating obvious friction between the two. We will come back to that.

A few hours ago, on-chain data indicated that FTX.com had stopped processing withdrawals. Also, Bankman-Fried, a regular on Twitter, suddenly went silent and hadn’t posted for nearly 24 hours.

Yesterday’s rush of withdrawals was followed by a sudden sharp drop in the price of the FTT token last night from around $22.00 to below $18 in just over 30 minutes. It continued to sink to around $15.50. When the acquisition deal was announced, there was a huge spike in the price of FTT which has since plunged again.

On the one hand, if FTX users are protected, it is good news for the crypto industry. But it could be better for the competition. Binance is already the dominant exchange internationally, with Coinbase in second place accounting for around 20% of its volumes. FTX was one of its emerging competitors.

It also raises a number of regulatory issues. These include why regulators have been so slow to regulate exchanges, what started the FTX run, and, in particular, what triggered the flash crash in the price of the FTT token. The latter could have been a shortage of funds to support the price, but that is speculation at this stage.

More to follow.