Bitcoin price stays below $17,000

Bitcoin prices are trading below $17,000 Wednesday as investor concerns over the emergency deal between two of crypto's largest exchanges, Binance and FTX, grow.

Bitcoin fell as much as $16,712 in the afternoon, the lowest point since November 2020, according to crypto indexing platform CF Benchmark. It has recovered above $16,900, but remains down 10% for the last 24 hours.

The decline comes as more reports surface that are prompting investors to question whether the non-binding deal made Tuesday will go through and what that could mean for the crypto industry at large.

"I think everyone outside of the upper crust of FTX and Alameda are pretty shell shocked today along with the rest of industry," Sean Farrell, head of digital asset strategy with Fundstrat, told Yahoo Finance.

A report Wednesday from Semafor — which is backed by FTX Founder and CEO Sam Bankman-Fried —said most of FTX's legal and compliance staff quit Tuesday evening, while a Coindesk report Wednesday morning, citing unnamed sources, raised doubts the deal will go through.

The Securities and Exchange Commission (SEC) is also reportedly expanding its investigation into the cryptocurrency platform's U.S. subsidiary, according to the Wall Street Journal.

"Clearly, something was off because there was a large hole in FTX's balance sheet where they were unable to meet customer deposits," Farrell said. "It's likely that it came from co-mingling customer deposits with trading practices of Alameda," which is both majority owned and founded by Bankman-Fried and FTX's market maker.

Farrell added the gap between liabilities is likely above $2 billion.

A communications spokesperson for Binance told Yahoo Finance that the company is still in the due diligence stage.

"We'll provide further comment when we have something more substantive to share," the spokesperson said.

FTX declined to comment on the matter.