The Aussie cryptocurrency exchange – Swyftx – and the investment platform – Superhero – have reportedly abandoned the previously planned $1 billion merger deal.
Some of the main reasons are the enhanced control over crypto firms in Australia and the diminishing interest in digital assets following the spectacular collapse of FTX.
As reported by The Australian Financial Review, Swyftx will sell Superhero back to its founders – John Winters and Wayne Baskin – and a group of investors for an undisclosed sum.
The end of the collaboration comes a few weeks after the exchange insisted a $1 billion merger agreement between the two entities is still on the agenda.
Co-Founder Winters thanked all involved investors, his family, and friends for helping him and Baskin get back at the helm of their brainchild. The exec pointed out the shrunk appetite for cryptocurrency products and services as the primary reason for the terminated deal.
The strict stance that Aussie watchdogs have displayed on digital asset businesses and the crash of FTX are also key motives, he added:
“Investor sentiment is turning back to quality. Our view is to revert back to long-term traditional investments and giving people access to those investments and more transparency and control over their superannuation via our super product.”
Other sources revealed that Swyftx has significant exposure to Binance. According to recent rumors, the US DOJ might prosecute the exchange for allegedly facilitating money laundering procedures, which could have triggered Superhero’s withdrawal from the agreement.
Swyftx’s CEO Alex Harper said the regulatory environment in Australia had changed drastically over the past few months, erasing the financial advantages of the merger:
“The policy environment has changed significantly since we announced the merger, and neither party has been able to realize the vision of the merger in any meaningful way. We currently face a scenario where there might be no realized 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.”
The collaboration’s end will also clean Swyftx’s $55 million debt to the investment platform.
The exchange dismissed 90 of its employees (around 40% of its total headcount) earlier this month to cope with an eventual market decline during the first half of 2023.
CEO Harper assured his firm had no direct exposure to the bankrupt FTX and raised hopes that the amendments will help it endure the current challenging times.