Cryptocurrency

Superhero cans merger with Swyftx citing regulatory scrutiny

With more regulators eyeing the crypto space as the FTX debacle continues, the $1.5 billion merger of online investing platform Superhero with the Australian crypto exchange Swyftx was shelved. 

In an email to its customers, Superhero highlighted that it will not be proceeding with its merger with the crypto exchange. According to the company, this is because of heightened regulatory scrutiny within Australia and globally. They wrote:

“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 its 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 and revealed 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 is 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 recession as its reasons. 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 also affected by 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 believed that it was bound to happen and more bankruptcies may follow. However, a user also gave Swyftx some encouragement, saying that good things are coming.

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