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A deal for major cryptocurrency exchange FTX collapsed on Wednesday as bigger rival Binance said it was pulling out after doing due diligence on the proposed acquisition.

Binance signed a non-binding agreement on Tuesday to buy FTX’s non-U.S. unit to help cover a “liquidity crunch” at the rival exchange, but the deal was subject to further due diligence.

“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,” Binance said in a statement.

A representative for FTX did not immediately respond to a request for comment, but Chief Executive Officer Sam Bankman-Fried told employees in a Slack message viewed by Reuters that Binance had not previously expressed reservations about the deal.

The turmoil over FTX has hit crypto prices. Bitcoin , the biggest cryptocurrency by market value, was last down 13 per cent on the day at $16,277. is also facing scrutiny from U.S. regulators over its handling of customer funds, as well as its crypto-lending activities.

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