With more regulators eyeing the crypto space as the FTX debacle continues, the $1.5 billion merger of Australian online investing platform Superhero with Australian crypto exchange Swyftx has been shelved.
In an email to customers, Superhero said it will not be proceeding with the merger because of heightened regulatory scrutiny of crypto within Australia and globally, writing:
“As a result of the current environment, we have decided that the best thing for our Superhero customers is to unwind the merger and move forward as a separate, unrelated company.”
The firm also assured users that their funds are safe, as neither their data nor their assets were provided to Swyftx.
The companies first announced the merger on June 8, revealing plans to enable trading between traditional and crypto assets. Back then, Swyftx co-CEO Ryan Parsons told Cointelegraph that the long-term goal for the merger was to explore interoperability between asset classes. However, things did not work out as planned.
Months later, the crypto exchange announced several layoffs. On Aug 19, the firm cut its staff by 21%, citing the bear market, inflation and a potential global recession. On Dec. 5, the firm announced that it has laid off another 35% of its employees, saying that while it wasn't exposed to FTX, it was "not immune" from the fallout.
Related: No more proof-of-reserve checks? Auditors quietly drop crypto projects from portfolios
After hearing about the layoffs, crypto community members reacted with various sentiments. One said it was bound to happen and that more bankruptcies may follow. However, another gave Swyftx some encouragement, saying that good things were coming.
Meanwhile, former FTX CEO Sam Bankman-Fried, who is currently in jail, has signed extradition papers. This means that he'll be turned over to the Federal Bureau of Investigation to face criminal charges in the United States.