In less than 48 hours after announcing its intention to buy rival FTX Trading, Binance pulled out of the proposed deal, sending the crypto market into a tailspin.

Earlier, the owners of the two exchanges, Samuel Bankman-Fried of FTX and Changpeng Zhao of Binance, announced the deal on Twitter.

In a U-turn, Changpeng Zhao, CEO of cryptocurrency exchange Binance, who barely days ago announced his plan to bail out troubled competitor FTX, said his firm would not be pursuing the deal. 

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.” the firm said.

The pullout dealt a blow to FTX founder Sam Bankman-Fried, who direly needed $580 million in capital to bail his struggling firm out of trouble. 

Binance had signed a nonbinding letter of intent on Nov. 8 that allowed the firm to either fully acquire the FTX exchange, proceed with a partial acquisition of assets, or walk away from the agreement. 

Though Binance and FTX are rivals, Zhao told employees that the collapse of FTX is not good for anyone in the industry. In an internal message, he said, "We did not master plan this or anything related to it. It was less than 24 hours ago that SBF (Bankman-Fried) called me. And before that, I had very little knowledge of the internal state of things at FTX."

The value of FTT has hit a rock bottom in the past few days, falling by 80% from Monday to Tuesday. It was a loss of about $2 billion in one day. After falling to $5 on Tuesday, FTT reached a value of $2.30 on Wednesday.

Binance explained that initially, it wanted to support the ailing crypto exchange by providing its customers with liquidity; however, issues were “beyond our control or ability to help.” The firm also said, “Every time a major player in an industry fails, retail consumers will suffer,” while adding that the ecosystem will eventually become more resilient with the weeding out of bad players.

Since the announcement of Binance pullout broke, Bitcoin and Ethereum have also lost value. Bitcoin's current value is the lowest it has been in two years.