Although it has no exposure to FTX, the Australian cryptocurrency exchange claimed it was “not immune” to its consequences.
The layoffs
Swyftx, an Australian-based cryptocurrency exchange, announced the layoffs (1) of a total of 90 employees in anticipation of the “worst-case scenario” that could result from the fallout from FTX and a potential decline in global trading volumes in 2019. Swyftx co-CEO Alex Harper announced the information in a statement on December 5 and noted that, despite having no exposure to FTX, the business was “not immune” to the fallout from the collapse of the exchange, adding:
“As a result, we must be ready for the worst-case scenario of further substantial declines in global trade.” volumes in H1 of the following year and the possibility of further “black swan” catastrophes.
A spokesman for Swyftx informed that despite these data increasing in November, the 35% personnel reduction was also anticipated to coincide with a decline in trading volumes. The representative stated,
“We have let off workers in anticipation of a possibly substantial decline in global trade volumes in the first half of 2023 and subsequent aftershocks from FTX’s failure.”
What led to this decision?
Harper claimed in the statement that the difficult choice was essential to surviving the long crypto winter. Our company is ideally situated to handle events like FTX. However, despite our best efforts, we cannot survive in the market vacuum, which is why we are moving quickly and in early action by drastically lowering the size of our crew.
Although indirectly impacted by the FTX bankruptcy, the Swyftx representative maintained that the company’s balance sheet was unaffected, adding, To be clear, I should clarify that we are not exposed to FTX. We maintain client cash in a 1:1 ratio and never lend out customer assets. Harper also disclosed that the personnel reductions would reduce operating expenses on the company’s balance sheet and that his company would become more risk-averse in its business choices. The representative said, Swyftx retains good revenue, but they are not ready to take any chances post-FTX and are being extra cautious about expenses next year. She added that priority areas like security, compliance, and customer support services wouldn’t be affected.
A Swyftx spokeswoman informed that the job reductions particularly impacted the research and development team at the company. The most recent round of staff reductions came after another one in August 2022, when 74 employees—or 21%—of the company’s workforce—left. When the market peaked in 2021, Harper said the firm expanded too rapidly, and they are just far larger than they need to be to exist and develop.
Why Digital Surge stopped withdrawals
Another Australian firm affected by the FTX epidemic is Digital Surge (2), an Australian trading platform that stopped accepting withdrawals on November 16. The cryptocurrency exchange acknowledged that it had stopped accepting deposits. Withdrawals, telling clients that they will provide further information in two weeks. But as of the writing of this article, the corporation hasn’t made any new public disclosures.
