Superhero can merge with Swyftx citing regulatory review

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As more regulators watch the crypto space as the FTX debacle continues, online investment platform Superhero’s $1.5 billion merger with Australian crypto exchange Swyftx has been scrapped.

In an email to its customers, Superhero stressed that it would not proceed with its merger with the crypto exchange. According to the company, this is due to increased regulatory scrutiny in Australia and around the world. They wrote:

Due to 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 company has also assured its users that their funds are safe, as neither their data nor their assets have been provided to Swyftx.

The companies first announced the merger on June 8 and revealed plans to enable trading between traditional and crypto assets. At the time, Swyftx co-CEO Ryan Parsons told Cointelegraph that the long-term goal of the merger was to explore interoperability between asset classes. However, things did not go as planned.

Months later, the crypto exchange announced several layoffs. On August 19, the company cut its workforce by 21%, citing the bear market, inflation and a recession as reasons. On December 5, the company announced that it had laid off an additional 35% of its employees, saying that while it had no exposure to FTX, it was also affected by the fallout.

Related: More Reserve Proof Checks? Auditors Quietly Abandon Wallet Crypto Projects

After hearing about the layoffs, members of the crypto community reacted with varying sentiments. It was believed that this was bound to happen and that other bankruptcies might follow. However, one user also encouraged Swyftx, saying good things were coming.

Meanwhile, former FTX CEO Sam Bankman-Fried, who is currently in jail, has signed extradition papers. This means the former FTX CEO will be handed over to the Federal Bureau of Investigation to face criminal charges in the United States.

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