When Binance Global Inc. said this week it was pulling together a deal to acquire the rival FTX.com cryptocurrency exchange, it was noted how fast events had moved.

And then they moved again, this time just as fast, but in the opposite direction.

Binance — the world’s biggest cryptocurrency exchange, valued at a reported US$300 billion and led by Changpeng Zhao — pulled out of the buyout just 24 hours after it was announced, saying that following “corporate due diligence” (in other words, a deep peek into the books at FTX) and citing allegations of “mishandled customer funds” it was dropping the deal.

FTX.com, which offers crypto trading platforms for non-U.S. residents, was previously valued in the region of US$30 billion and led by 30-year-old Sam Bankman-Fried, known as a wunderkind of the industry for rescuing other crypto businesses in trouble, including exchanges. 

Bankman-Fried, better known as SBF, was a billionaire, but it’s no longer clear if that’s the case following the events of the last few days. Earlier reports suggested FTX had a US$6 billion hole in its balance sheet, but the speculation now is it could be much larger.

The same reports said SBF had earlier gone to Silicon Valley and Wall Street for funding, before turning to Binance. With Binance now slamming that door, questions remain if SBF can find another white knight, and fast. 

Bloomberg reported overnight that FTX faced an US$8 billion fund shortfall and needed an immediate US$4 billion to remain solvent, citing a person who declined to be identified to discuss the developments.

FTX is attempting to raise rescue financing in the form of debt, equity, or a combination of the two, the person said. Another option is bankruptcy. Yet another is a coalition of stakeholders or other partners that could pull together a rescue.

Lennix Lai, managing director at Seychelles-based cryptocurrency exchange OKX, said such a coalition is a possibility, saying they were open “to help FTX from the very first day. And we do want to help the customers in FTX.”

He added that OKX would have “interest” in such a coalition but said they are not in such talks and all the finances would need to be closely looked at first.

The FTX saga is another lesson about risk management, Henry Liu, the CEO of the BTSE crypto exchange based in the British Virgin Islands, told Forkast in an interview yesterday and before Binance had reversed itself on the FTX offer. 

Today, Liu said: “It seems that Binance walked away from the deal after discovering the amount of money needed to shore up FTX’s capital position.”

He added that he sees bankruptcy as likely because there aren’t many white knight investors large enough to save the FTX exchange.

“FTX shareholders could very well be forced to take pennies on the dollar, depending on the size of the company’s liabilities,” he said.

“FTX has many lending counterparties throughout the industry, and its potential default on obligations to them could impact other crypto platforms over the next few weeks. With this in mind, we recommend that users diversify their assets across a wider range of platforms to mitigate risk.”

Alicia Kao, managing director of KuCoin crypto exchange, said the FTX situation is a loss for the crypto industry. 

“It’s going to hurt hundreds and thousands of users. They’re going to lose their money. And it’s definitely not a good thing for the entire industry,” she said. “I think [they played] an important role in the crypto industry.”