Binance Chief Executive Changpeng Zhao said on Tuesday the company had signed a non-binding agreement to buy rival FTX's unit,, to help cover a "liquidity crunch" at the cryptocurrency exchange.

FTX has come under pressure after Changpeng Zhao, head of rival exchange Binance - the world's largest - said on Sunday his firm would liquidate its holdings of the FTX token, FTT, due to unspecified "recent revelations".

"This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire and help cover the liquidity crunch," said Zhao in a tweet, noting that Binance has the discretion to pull out from the deal at any time.

In a tweet, Sam Bankman-Fried, FTX founder and CEO said that teams are working on clearing out the current backlog of withdrawals and that all assets will be covered 1:1.