Amid the current extremely torrid crypto and macro economic times, Binance, the world’s largest cryptocurrency exchange, announced on Tuesday that it had signed a non-binding letter of intent (LOI) in order to acquire FTX, its rival in the crypto world.

If the deal goes through – FTX informed that it reached an agreement on a strategic transaction with its rival, pending due diligence – it will put two of the world’s leading crypto exchanges under the aegis of Binance and its CEO Changpeng Zhao. More popularly known as CZ, Zhao was involved in a public dispute with FTX CEO Sam Bankman-Fried, also known as SBF, over the past few days.

Despite FTX being “fully acquired” by Binance, the American-regulated exchanges of the two – Binance.US and FTX.US – will continue to work independently.

“This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” Zhao announced in a tweet. In a thread, he said that there was “a lot to cover and will take some time” as it was a “highly dynamic situation” and that Binance was “assessing the situation at any time.” Of course, since the LOI in this instance is a non-binding document, Binance has the discretion of pulling out of the deal at any time, Zhao added.

This decision comes as a surprise, especially when one considers the recent spat between the CEOs of the rival cryptocurrency exchanges. The clash between the two came after Binance revealed its plans to sell its holdings of FTT, which is the native token of FTX exchange, that it had received last year after leaving its position as an equity investor in FTX, as a “post-exit risk management.” Binance’s decision was influenced, in turn, by a recent Coinbase report that indicated that much of the balance sheet of market making firm Alameda comprised of FTT, leading to investor concerns that any large selling orders of the token could potentially cause the price of FTT to fall. As of Sunday, Binance had around $580 million worth of FTT, and as of Tuesday, FTT dropped by 76.4%.

The 30-year-old Bankman-Fried retorted that Binance was going after its rival with “false rumours.” Since then, however, FTX noted a surge in withdrawals – $6 billion worth of net withdrawals over the past 72 hours – which led to a point where the crypto exchange lacked the funds to meet the demand for withdrawals and halted processing withdrawals altogether on Tuesday. And after crypto companies and traders showed their concerns about its financial stability, the crypto exchange reached out to its rival for help.

Bankman-Fried offered a “huge thanks” to Zhao and Binance, adding that “CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.” For now, FTX is working on clearing the withdrawal backlog to clear out “liquidity crunches.”

While this development will further cement Binance, with a valuation of over $300 billion, as the world’s largest crypto exchange, it will also ensure that one of its rivals does not go on to become a challenge to its dominance. FTX, which was valued at $32 billion in January, is backed by several high-profile players such as Sequoia, BlackRock, Tiger Global, SoftBank, Insight Partners, Lightspeed Venture Partners, and Coinbase Ventures.

The acquisition also highlights the instability in the crypto industry, which has already seen its fair share of losses this year. Bitcoin, the world’s largest cryptocurrency, fell below $18,000 to reach $17,300 on Tuesday, which is a new low for the crypto ever since it reached record heights in November 2020. Ether dropped to fall as low as $1,228, before it recovered a little to reach $1,311. This was further compounded by a $2 trillion crash in the crypto industry this year, which, when combined with high inflation and brutal sell-off of cryptos in a bid to reduce investment risk, has sent the crypto industry in turmoil in 2022.