The price of Bitcoin has touched a two-year low after the world's biggest cryptocurrency exchange pulled out of a deal to rescue its smaller rival.

The price of other digital coins also fell after Binance scrapped its deal to buy FTX, citing due diligence concerns.

It has left FTX customers unable to make withdrawals from the exchange, which is used to buy and sell various digital tokens.

There are also fears of further crypto market volatility if FTX goes bust. On Thursday Bitcoin fell below $16,000 (£14,049) for the first time since 2020 as investor confidence was hit by the news.

Concerns about FTX's financial health reportedly triggered $6bn (£5.2bn) of withdrawals in just three days.

Binance said reports of "mishandled customer funds and alleged US agency investigations" had swayed its decision not to buy FTX.

Binance said in a statement posted on Twitter that the issues facing FTX were "beyond our control or ability to help".

A notice on its website said: "FTX is currently unable to process withdrawals. We strongly advise against depositing."

FTX's founder Sam Bankman-Fried and Binance's chief executive Changpeng "CZ" Zhao are two of the most powerful people in the cryptocurrency market and high-profile rivals.