Brisbane-based cryptocurrency exchange Swyftx has cut 90 jobs citing the aftershocks of the collapse of global exchange FTX and a sharp fall in global trade.
In a message to staff on Monday, co-founder and CEO, Alex Harper, said while Swyftx had no direct exposure to FTX, the company was not immune to the fallout in crypto markets, and Swyftx was preparing for further significant drops in trade volumes in the first half of next year “and the potential for more black swan-type events”.
The cut represents approximately 35% of the company, which currently employs 235 people.
The affected staff will be contacted directly via email for consultation and will get severance pay within seven days of this week, and receive employee stock option plans for tenure plus six months.
The exchange has 630,000 customers in Australia and Harper said Swyftx was “uniquely well-positioned” to weather something like FTX’s collapse, but the company did not exist in isolation from the cryptocurrency market. He said the company, however, was too large.
“We are simply far larger than we need to be to operate and grow next year and beyond,” he said.
“We were genuinely hopeful in August that the revenue modelling we’d done would not require any further reduction in staff numbers, but the FTX situation has forced us to plan for a period of diminished trading activity.
“The truth is that Swyftx grew too fast.”
Harper said many at Swftx “are nursing a very strong sense of injustice” about the actions of FTX, and the impact on the industry.
“Cryptocurrency wasn’t the villain in this story, it was all too familiar human greed and indifference,” he said.
“Nonetheless, I’m afraid only time and Swyftx continually demonstrating it is different, each and every day, will put FTX behind us.”
Swyftx has a partnership with the NRL, which a spokesperson said was expected to continue next year.
FTX put its Australian companies into voluntary administration with KordaMentha last month after the collapse of the global cryptocurrency exchange at the start of November. About 30,000 Australian customers were owed money or cryptocurrency from the exchange, in amounts ranging up to $1m.
The Australian Securities and Investment Commission (Asic) at the time suspended the company’s Australian financial services licence (AFSL), which FTX was able to obtain by buying out a company that already held the licence.
Asic chief operating officer, Warren Day, appeared before a senate inquiry on Monday, where he was asked by Labor senator Deborah O’Neill on Monday about why Asic did not assess FTX’s fitness to hold the licence.
Day confirmed Asic had little power to assess businesses at the point of takeover for the fitness to hold a licence, and it was something Asic had been raising as an issue. He said since 2014, Asic had restricted the number of licences similar to what FTX had obtained, and had only issued a handful of new licences.
He said this made a takeover of the type FTX did to obtain such a licence very lucrative, and said the cost to buy a licence through that method was about $150,000 in 2014, but had increased to $2m in 2019, and would be even more today.
“That is one of the most difficult and highly prized licenses in the market. But … our ability then to scrutinise those off-market transfers of licenses is very low to nonexistent,” Day said.
O’Neill said it was a “massive hole” in regulation that allowed “a real cowboy” like FTX to enter the market and obtain a licence through such a method.
Day said there were limited resources for Asic to check every business when a takeover occurs – estimating there were likely hundreds a year.
Asic chair Joseph Longo said whatever regulation would be put in place, there would still be limits to protecting consumers from the “dark side” of cryptocurrency, and currently Asic was working within its limited resources and the limited regulation in the space.
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FAQs
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.
Who is to blame for FTX collapse? ›
FTX was a leading cryptocurrency exchange that went bankrupt in November 2022, amid allegations that its owners had embezzled and misused customer funds. Sam Bankman-Fried, the CEO of the exchange, was sentenced to 25 years in prison and ordered to repay $11 billion.
Did people lose money with the collapse of FTX? ›
According to the prosecution, Bankman-Fried stole “billions of dollars” from the crypto exchange's customers “out of sheer greed”. One key issue was how much money FTX's customers lost. During the trial, the prosecution and its witnesses repeatedly – in fact, 97 times – put that number at $US8 billion ($12 billion).
What triggered FTX crash? ›
FTX and FTX.US crashed due to a lack of liquidity and mismanagement of funds, followed by a large volume of withdrawals from rattled investors. The value of FTT plummeted, taking other coins down with it including Ethereum and Bitcoin, which reached a two-year low on Nov. 9, 2022.
Will the cryptocurrency industry be able to recover from the FTX scandal? ›
Nov 3 (Reuters) - The cryptocurrency market is starting to bounce back a year after the collapse of crypto exchange FTX and other big players in 2022 crushed prices, tarnished the industry and prompted a regulatory crackdown.
How much money did FTX steal? ›
NEW YORK, March 28 (Reuters) - Sam Bankman-Fried was sentenced to 25 years in prison by a judge on Thursday for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the last step in the former billionaire wunderkind's dramatic downfall.
Who is behind the FTX fall? ›
Sam Bankman-Fried, known in the crypto community as "S.B.F.," founded the collapsed FTX exchange in 2019, after launching the crypto hedge fund Alameda Research in 2017. Prior to his involvement in the cryptocurrency sector, he worked as a trader on Wall Street.
How much of FTX money is recovered? ›
A progress report at the end of August put the amount recovered since the bankruptcy filing at $7.8 billion, compared with $9 billion claimed by the platform's creditors.
How much money went missing from FTX? ›
At Bankman-Fried's sentencing hearing, Kaplan agreed. He said FTX's customers had lost some $8bn and that its investors had lost $1.7bn.
Did FTX customers get their money back? ›
For FTX customers, being made whole, according to a judge's ruling, means getting the cash equivalent of what their crypto was worth in November 2022. In other words, they're not seeing any of the upside of FTX's investments or being given virtual coins that would allow them to cash out at higher valuations.
FTX founder Sam Bankman-Fried and senior staff spent customer funds on technology investments, luxury real estate and political contributions, among other things. The missing funds are at the heart of Bankman-Fried's criminal trial, which kicked off in Manhattan federal court this week.
How much did Bitcoin fall after FTX collapse? ›
The leading cryptocurrency by market value fell over 8% to under $62,000, data from charting platform TradingView shows. That's the biggest single-day percentage (UTC) decline since Nov. 9, 2022. That day, prices tanked over 14% as Sam Bankman Fried's FTX, formerly the third largest crypto exchange, went bankrupt.
Did everyone using FTX lose their money? ›
Rees is one of more than an estimated 1 million customers potentially facing losses after FTX, one of the largest crypto exchanges at the time, suddenly collapsed and filed for bankruptcy in November. It soon emerged that customer funds had gone missing.
Who stole FTX crypto? ›
A thief who stole more than $470m (£383m) in cryptocurrency when FTX crashed is trying to cash it out while the exchange's founder is on trial. Sam Bankman-Fried's high-profile court case began last week.
Will crypto recover in 2024? ›
A recent report predicts that Bitcoin will reach a new all-time high in 2024. Bitcoin (BTC) is expected to reach a new record of $88,000 (€82,000) throughout the year, before it settles around $77,000 at the end of 2024, according to a new report. The cryptocurrency's current price sits at around $43,000.
Who started the FTX collapse? ›
Sam Bankman-Fried, the former CEO of FTX, was a 30-year-old crypto wunderkind who for years garnered goodwill as a philanthropist and leading proponent of industry regulation. Now, his ex-firm is bankrupt and he has been convicted of defrauding investors out of billions of dollars.
Who is responsible for FTX? ›
FTX founder Sam Bankman-Fried was sentenced to 25 years in prison for the securities fraud conspiracy that doomed his cryptocurrency exchange and a related hedge fund, Alameda Research. Bankman-Fried also was ordered to pay $11 billion in forfeiture at the sentencing in Manhattan federal court.
Who predicted FTX collapse? ›
It's not clear how long CZ had his doubts about FTX, but after a revelation by industry publication CoinDesk that Alameda might be insolvent, he publicly cast doubt on FTX and set off the cascade that ended with bankruptcy a few days later.
Who is responsible for crypto crashes? ›
Bitcoin fell to a two-year low and the crypto market slid after a shocking run on billionaire Sam Bankman-Fried's FTX cryptocurrency exchange and subsequent pact for an acquisition from rival Binance, as the crypto industry shook from the collapse of one of its foremost institutions.
