Crypto exchange Swyftx and retirement platform Superhero walk away from $1.5 billion merger

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A $1.5 billion merger between two Australian investment apps that was to create a powerhouse that would manage cryptocurrencies, stocks and pensions in one place has seen the deal collapse .

Swyftx, the Brisbane-based cryptocurrency exchange, and online brokerage and retirement platform Superhero announced that the move would bring 800,000 customers together under one roof.

The two companies had trumpeted the “historic merger” with Swyftx co-founder Alex Harper saying the move was an “evolution from disruptive tech players to one major financial institution that can grow in domestic and international markets.” ” in June.

But now the AustralianFinancial Review has revealed that Swyftx will resell Superhero to its founders, John Winters and Wayne Baskin, and its investors after the crypto sector was hit by a regulatory crackdown.

It comes as Swyftx laid off 35% of its staff in a second round of savage cuts in December, blaming the massive layoffs directly on FTX’s collapse when the $32 billion cryptocurrency exchange filed. his record amid explosive revelations.

It had already laid off 21% of its workforce in August after an employee learned she had lost her job while on honeymoon in Hawaii.

Swyftx, which has about 600,000 customers, launched a fundraiser in November to fund its growth plans and the integration of Superhero.

But Mr Harper said the decision to part ways was due to hostility from regulators in the crypto sector.

“The political environment has changed significantly since we announced the merger and neither party has been able to deliver on the merger vision in any meaningful way,” he told AFR.

“We currently face a scenario where there may be no realized benefits for customers from the merger until 2024 at the earliest.

“It’s a disappointing result, but ultimately we made this decision in the best interests of both Superhero and Swyftx, and their customers.”

Staff were told the deal fell apart in a private email thread on Tuesday.

ASIC Chairman Joe Longo named targeting the unregulated crypto sector as part of his corporate regulatory activities and he launched a series of actions this year.

Finder is being sued by ASIC for allegedly providing illegal financial advice and putting consumers at risk after offering a cryptocurrency product without a financial license.

She filed a civil lawsuit in federal court against a Finder subsidiary over a product offered through her registered cryptocurrency exchange called Finder Wallet.

This is ASIC’s third recent action against a company offering a crypto-asset-related product that the regulator considered a financial product.

ASIC had also gone after stockbrokers adding “harmful” features to their platforms.

“Cryptoassets are high risk, volatile and complex,” ASIC commissioner Danielle Press said in August.

“Brokers should think very carefully before offering crypto assets through their stock trading apps.”

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