The two largest offshore cryptocurrency exchanges are merging, after a week of public squabbling between Binance’s chief executive, Changpeng Zhao, and FTX’s boss, Sam Bankman-Fried, triggered a bank run at the latter’s exchange and an embarrassing forced sale on Tuesday.

“This afternoon, FTX asked for our help,” tweeted Zhao. “There is a significant liquidity crunch. To protect users, we signed a non-binding [letter of intent], intending to fully acquire”

The news was confirmed in a tweet by Bankman-Fried. He said: “Things have come full circle, and’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for (pending DD etc).”

The deal will see FTX being “fully acquired” by Binance, in return for covering the cash crunch at the embattled exchange. Further terms were not disclosed by either party.

Both Binance.US and FTX.US, the associated American regulated exchanges of the two companies, will remain independent.

Bankman-Fried is a major donor to the US Democratic party, and FTX was a top-20 contributor to Joe Biden’s presidential campaign, giving over $5m. Bankman-Fried is reported to have donated about $40m this year in the run-up to today’s midterm elections.

The two chief executives are among the most prominent players in the industry, known by their initials – CZ and SBF – and each capable of moving markets with just a tweet. They have worked together in the past, with Binance investing in FTX at the exchange’s inception.

But on Sunday, CZ posted a short thread explaining that, “due to recent revelations that have come to light”, the company would be selling roughly $2bn-worth of FTT crypto tokens that FTX had created years before and issued to investors.

Although CZ did not specify the allegations, his post came just days after a pseudonymous crypto researcher, Dirty Bubble Media, had accused another of SBF’s companies, Alameda Research, of insolvency: Alameda held a significant chunk of its own assets in FTT. “It’s almost as if SBF found a way to hack the financial system, printing billions of dollars out of thin air against which he was able to borrow massive sums from unknown counterparties,” the post said.

Binance’s decision to sell the tokens prompted an immediate response, with users of FTX rushing to withdraw their funds from the exchange. On Monday, SBF hit back at CZ, posting: “A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine. FTX has enough to cover all client holdings … I’d love it, [CZ], if we could work together for the ecosystem.”

CZ feigned ignorance, saying he had written the thread “in 5 mins … Little did I know it was going to be ‘the straw that broke the camel’s back’. My tweets were simple. There were questions about a large ($580m) FTT deposit to Binance, and we were transparent about the fact that we are closing our FTT position.”

In the meantime, the withdrawals continued, until on Tuesday morning, FTX stopped processing customer requests to take their money out. Blockchain records show a four-hour gap during which only a particular type of crypto asset, called an ERC-20 token, was recorded leaving the exchange’s digital coffers. At 4pm, SBF conceded defeat.

“Our teams are working on clearing out the withdrawal backlog as is,” he wrote, after announcing the sale of FTX. “This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. – we apologize for that. But the important thing is that customers are protected.

“A *huge* thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry … I know that there have been rumors in media of conflict between our two exchanges, however Binance has shown time and again that they are committed to a more decentralized global economy while working to improve industry relations with regulators. We are in the best of hands.”

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