The regulatory environment is not one in which mergers of traditional businesses and crypto-native companies can easily take place, Swyftx’s general counsel said.
Australian crypto exchange Swyftx and share trading and superannuation platform Superhero canceled their planned merger, saying the decision was reached after the government turned up the regulatory heat on the crypto industry.
The plan was announced in June, and was touted as a “historic merger” that would create a A$1.5 billion “digital and traditional finance powerhouse” and bring over 800,000 customers under one roof.
The cancelation comes after the Australian Securities and Investments Commission (ASIC) sued three crypto-related entities – BlockEarner, BPS Financial, the company behind the qoin digital token, and financial product comparison website Finder.com. The government, meantime, is taking steps toward tightening crypto rules next year by inviting comments and feedback for a consultation paper.
“The ongoing regulatory uncertainty around crypto-assets, combined with rising regulation-by-enforcement, does not encourage an environment where mergers of more traditional businesses and crypto-native companies can easily take place,” Adam Percy, Swyftx’s general counsel, said in a WhatsApp message.
The environment isn’t helped by the collapse of several high-profile companies, including crypto exchange FTX and crypto lender Voyager Digital and a decline in the crypto market. Earlier this month, Swyftx cut 90 jobs or 35% of its total workforce because of the market downturn.
“The volatility in the market as well as the current regulatory environment has made it increasingly difficult to achieve the initial vision that inspired the merger earlier this year,” Superhero CEO John Winter said. “Superhero will return to being independently owned by myself and my co-founder Wayne Baskin.”
The cancelation was reported earlier by the Australian Financial Review.