Bitcoin hits lowest point in two years as the Binance-FTX deal falls through

BTC (Bitcoin) price has fallen sharply after the world's biggest cryptocurrency exchange pulled out of a deal to rescue its smaller rival.

The price of other digital currencies like Bitcoin also fell after news that Binance scrapped its deal to buy FTX citing due diligence concerns.

The FTX exchange has left some of its customers unable to withdraw funds, which leaves them unable to make transactions and buy various digital tokens. There are fears that the crypto market might experience further volatility if the exchange goes bankrupt.

Yesterday, Bitcoin hit $16,000 for the first time since 2020 as investors lost confidence. It quickly bounced back.

Ethereum, another popular digital coin, also tumbled before regaining ground.

FTX's financial problems prompted $6 billion in withdrawals over the course of just three days.

Though Binance originally planned to go through with the acquisition of FTX, reports of "mishandled customer funds and alleged US agency investigations" swayed their decision.

According to Reuters, the US Security and Exchange Commission (SEC) is investigating FTX’s handling of customer funds and their crypto-lending activities. The SEC is specifically investigating whether the company has been using customer funds to cover operating expenses, such as referral bonuses, sales commissions, and marketing costs.

The authorities are also looking into whether the platforms breached securities laws, as they used customer assets.

In a statement on Twitter, Binance said that the issues with FTX are "beyond our control or ability to help."

Sam Bankman-Fried and Changpeng Zhao are two of the most powerful people in cryptocurrency. They're also some of its most notable rivals.

FTX is currently experiencing issues with their withdrawal process. We strongly encourage you not to make any deposits until the issues are resolved.