Crypto Exchange Swyftx Withdraws From $1B Merger Deal Amid Australian Regulatory Scrutiny

Australia-based cryptocurrency exchange Swyftx has been compelled to renege on a planned 1.5 billion Australian dollar ($1 billion) merger deal with superannuation fund platform Superhero, The Australian Financial Review reported on Tuesday.

The transaction was first disclosed in June by both parties.

The agreement was to establish a large wealth management firm that would manage investments totaling $1 billion in direct shares, superannuation, and cryptocurrency for up to one million Australian clients.

The deal is now reportedly off because of Australia's crypto regulatory environment.

John Winters, a co-founder of Superhero, was quoted by AFR as saying that the country's investor enthusiasm for cryptocurrency products had decreased.

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Winters also made a connection between the recent FTX FTT/USD bankruptcy and the failure of the merger.

The co-founder of Superhero further stated that the company was focusing on "long-term traditional investments" that had "more transparency."

AFR cited more Superhero-related sources that provided additional perspective about the merger's collapse.

According to these sources, Superhero was worried about Swyftx's connection to Binance.

Regulators continue to closely monitor Binance, particularly in the United States, where the crypto exchange is being looked at for possible money laundering.

The development is Swyftx's most recent commercial setback. The Australian cryptocurrency exchange laid off 90 staff members earlier this month, after firing 74 workers during the summer.

The deal's failure makes it the most recent merger involving cryptocurrencies to fail this year.

SPAC transactions have fallen through for companies like Circle, Prime Brokerage, a crypto miner, and Binance in 2022.

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