Cryptos fall as FTX-Binance turmoil spooks market

STORY: Cryptocurrencies tumbled again Wednesday (November 9).

Markets have been spooked by the abrupt rescue of major exchange FTX by rival Binance.

It’s raised questions about the stability of the whole sector.

By Wednesday lunchtime in Europe bitcoin was off around 6%.

Rival ether was even harder hit, down about 10%.

FTX’s own FTT token has collapsed.

A day earlier, Binance signed a non-binding agreement to take over its competitor.

It said the move came amid a “liquidity crunch” at FTX.

Worries over its solvency had sparked a surge of withdrawals.

Now the terms of the agreement haven’t been disclosed, leaving markets unsure whether it will proceed.

Regulators might also want to look at the deal.

It all marks a sharp reversal of fortune for FTX chief Sam Bankman-Fried.

He had spent recent months playing the white knight, coming to the rescue of other troubled crypto firms.

The whole sector has struggled as rising interest rates and other worries prompt investors to ditch riskier assets.

That has seen bitcoin lose around two-thirds of its value this year.

With FTX going so quickly from saviour to saved, investors wonder whether more dominoes are set to topple.