NYT

Binance, a major crypto exchange, late yesterday reversed course on its decision to bail out FTX, a rival exchange that tanked after Twitter posts from a rival questioned the stability of its business. The tweets sparked what was essentially a three-day bank run of an estimated $6 billion that sent FTX into crisis.

Binance issued an unusually harsh statement explaining why it backed out of the deal, citing “mishandled customer funds” and investigations by regulators. The investigations could not be confirmed. Internally, Sam Bankman-Fried, FTX's chief executive, told employees that Binance “had not previously informed us or expressed those reservations.”

The deal’s collapse has sent shudders through the entire crypto industry. As news spread of FTX’s collapse, crypto markets took a battering, with Bitcoin and Ether both dropping more than 20 percent in value since Tuesday.

Background: Bankman-Fried, a 30-year-old entrepreneur who built FTX into a $32 billion company, was a major political donor to Joe Biden’s presidential campaign. His business was built on a type of risky trade — in which investors borrow money to make big bets on the future value of cryptocurrencies — that remains illegal in the U.S.