Crypto exchange Binance said on 8 November that it had signed a letter of intent to acquire rival FTX Trading, which it said was facing a liquidity crunch.

FTX said it agreed to a strategic transaction with Binance, pending due diligence.

The deal comes after a clash between the heads of the two firms came to a head in recent days and spurred a significant selloff in crypto assets including bitcoin.

Bitcoin pared early declines, recently trading down 2.8% from over 5% earlier. Ether, another closely watched crypto, is 3% lower on the day. Meanwhile, Binance Coin — Binance’s crypto exchange token — surged 12% following the news. FTX Token was down 21%, according to CoinDesk.

“There is a lot to cover and will take some time,” said Binance founder Changpeng Zhao on Twitter. “This is a highly dynamic situation and we are assessing the situation in real time. Binance has the discretion to pull out from the deal at any time.”

Referring to an FTX token whose decline this week was one of the key vectors of the clash, he said, “We expect FTT to be highly volatile in the coming days as things develop.”

This article is part of live coverage from The Wall Street Journal, a fellow Dow Jones Group brand

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