Australian crypto exchange Swyftx has walked away from a $1.5 billion merger deal with share trading platform Superhero. The news comes as regulators continue their crackdown on crypto firms in the wake of the wake of the sudden collapse of world-leading cryptocurrency exchange FTX.
According to a recent report from the Australian Financial Review, Swyftx will sell Superhero back to its original founders, John Winters and Wayne Baskin along with a number of notable investors who first funded the brokerage platform nearly two years ago.
Regulators to blame for the failed merger
In a written statement, Swyftx’s co-CEO Alex Harper said that the de-merger had little to do with the financial fallout stemming from the FTX meltdown, nor the continued decline in crypto asset prices. Instead, Harper insisted that increased aggression from regulators towards the crypto industry was to blame.
“The policy environment has changed significantly since we announced the merger and neither party has been able to realise the vision of the merger in any meaningful way,” Mr Harper wrote.
“We currently face a scenario where there might be no realised benefits to customers from the merger until 2024 at the earliest. It is a disappointing outcome but ultimately, we took this decision in the best interests of both Superhero and Swyftx, as well as their customers,” Harper added.
The announcement comes less than three weeks after Swyftx assured its customers that the deal was still on track despite laying off 40% of its staff, the second round of major firings for the struggling exchange in just four months. In late-August the exchange fired 74 employees, cutting its workforce by 21%. At the time, Harper explained that the move was made to “stabilise” the costs of the business amidst a sliding market.
Swyftx and Superhero first announced the ambitious billion dollar merger deal in June this year, which would have seen the two join forces to create a platform capable of granting Australian investors access to cryptocurrency, shares and options for superannuation management.