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Brisbane Crypto Exchange Swyftx Fires 90 Staff As FTX Collapse Carnage Spreads
Brisbane-based cryptocurrency exchange Swyftx has fired 90 employees or 35 per cent of the company’s workforce ahead of an expected prolonged downturn in crypto sentiment, exacerbated by the recent collapse of global exchange FTX.
Kabir V.
6:04 5th Dec, 2022
Markets

This is the second round of redundancies for the crypto exchange this year, and comes as Swyftx undergoes a capital raise in the hopes of beefing up its balance sheet and ensuring its $1.5 billion merger with budget stockbroker Superhero goes ahead.

According to documents filed with ASIC last week, Swyftx has suffered a 23 per cent fall in its after-tax profit thanks to a sharp downturn in crypto prices and a global investor rejection of riskier assets in a rising interest rate environment.

Swyftx booked a $36.7 million profit after tax for the 12 months to June 30, down from $48.2 million in the prior period.

The bulk of the redundancies are set to come from the research and development department, which houses many highly paid engineers. Fellow Australian-founded exchange CoinJar laid off 20 per cent of its workforce last week.

Chief executive officer Alex Harper announced the redundancies through a Slack message, where he outlined the need for Swyftx to get costs under control.

“Sadly, we have let go of staff in expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse,” a Swyftx spokesman said.

“Prudently managing the business remains our priority next year. We remain one of the two largest exchange teams in Australia, meaning we’ll continue to provide the highest standards of compliance, security and customer experience in the ANZ region.”

Crypto investors are reeling after FTX Trading, the third-largest crypto exchange founded and run by 30-year-old Sam Bankman-Fried collapsed earlier this month.

Revelations that Mr Bankman-Fried had overseen the transfer of billions of dollars of customer money over to another trading business he owned called Alameda Research, sent shockwaves through the industry.

Both FTX and Alameda Research are in the midst of bankruptcy proceedings after they failed to withstand a “run” on their assets, and it has been revealed the internal finances of both businesses were inextricably linked.

In response to the opaque operations of FTX, and other centralised crypto exchanges around the world, several Australian exchanges have pledged to publish a “proof of reserves”. This aims to reassure crypto investors their deposits and accounts are backed by reserves that can be called upon in the event of a withdrawal.

Nearly 30,000 Australian investors have been caught up in the FTX collapse and are hoping to claw back money through a bankruptcy process run by KordaMentha for the local entities, FTX Australia and FTX Express.

Earlier this year, Swyftx made 74 staff redundant.

Swyftx is reported to still owe Superhero $55 million as part of the acquisition it agreed near the top of the cryptocurrency and tech stock bubble in June 2021.

Billionaire businessman Alex Waislitz and funds managers Ophir Asset Management and Wilson Asset Management are investors in Swyftx, which receives the bulk of its liquidity and access to crypto tokens through a partnership with global exchange Binance.

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