Swyftx

Swyftx to chop its ‘Earn’ program this week, citing murky regulations

Australian crypto exchange Swyftx has decided to close its Earn program due to a lack of clarity around crypto products regulation.

Australian crypto exchange Swyftx is set to shutter its crypto-interest product this week, citing a “constantly changing regulatory landscape” for crypto products in the country. 

From Jan. 10, the crypto exchange will cease to operate the “Earn” program, with users having their entire Earn balances returned to their trade wallets.

Swyftx said while the decision might be “disappointing” for users, it is “committed to doing what is best for the program in the near term.”

“While we believe in the value and potential of cryptocurrency, what we currently need is greater clarity on the regulation of crypto offerings such as Earn.”

The announcement was posted by Swyftx on Dec. 27 but went largely unnoticed at the time given the holidays. 

The news comes just weeks after Australian regulators launched actions against fintech firm Block Earner as well as Finder.com’s crypto yield products for allegedly being offered without the required licensing.

Swyftx has not permanently closed the door on Earn though, with the exchange saying it would consider re-opening the program once the rules are more straightforward.

In a statement to Cointelegraph, Swyftx said it was closing its Earn offering due to “uncertainty of the current regulatory context.”

“We hope to reopen it once we have settled rules in place in Australia around interest-yielding crypto offerings.  In the meantime, our priority is to continue to positively engage with regulators and the government to protect existing and future Aussie crypto users,” it added. 

First launched in May, Swyftx’s Earn program allowed users to earn daily interest on certain crypto tokens by loaning them to Swyftx.

Related: Superhero cans merger with Swyftx, citing regulatory scrutiny

The Australian Securities & Investments Commission has been actively eyeing down Australian crypto product providers in recent months.

In addition to the actions against Block Earner and Finder.com in November and December, it also took action against the creators of the Qoin token in October last year for “misleading” representations of its token.

The Australian federal government has also stepped up efforts to regulate the crypto sector. 

In December, the Australian Labor Government announced it would release a consultation paper in early 2023 as part of its token mapping initiative.

Australian Treasurer Jim Chalmers said the consultation paper would cover how certain crypto assets should be regulated alongside frameworks for company licensing, asset custody and consumer protections.

Update Dec. 9, 6:22am UTC: Added a statement from Swyftx.

Swyftx cuts 35% of staff as it braces against ‘worst-case scenario’

The Australian crypto exchange said while it had no exposure to FTX, it was “not immune” to its fallout.

Australian-based crypto exchange Swyftx has laid off a total of 90 staff members, which it said was in preparation for a “worst-case scenario” caused by the fallout of FTX and a potential fall in global trading volumes next year. 

The news was shared by Swyftx co-CEO Alex Harper in a Dec. 5 statement, noting that despite not having any exposure to FTX, the company was “not immune” to the fallout over the bankrupt exchange, adding:

“As a result, we have to prepare in advance for a worst-case scenario of further significant drops in global trade volumes during H1 next year and the potential for more black swan-type events.”

A Swyftx spokesperson told Cointelegraph that the 35% staff cut was also in anticipation of a fall in trading volumes, despite these figures increasing in November.

“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,” said the spokesperson.

Harper in the statement said the tough decision was necessary in order to get through the prolonged crypto winter:

“Our business is uniquely well-positioned to weather events like FTX […] But as much as we might wish it, we do not exist in isolation from the market and that’s why we are acting fast and acting early by significantly reducing the size of our team.”

The Swyftx spokesperson reiterated that the company’s balance sheet remained intact despite it being indirectly affected by the FTX collapse, adding:

“Just for clarity, I should say we have no exposure to FTX. We hold customer funds 1:1 and don’t lend customer assets to third parties.”

Harper also revealed that his company would become more risk-averse in its business decisions and that the staff cuts would ease operational costs on its balance sheet.

“Swyftx maintains strong revenue but we’re not willing to take any risks post-FTX and are being exceptionally cautious about costs next year,” added the spokesperson, who also noted that priority areas like security, compliance and customer support services wouldn’t be affected.

As for who was laid off, a Swyftx spokesperson told Cointelegraph that the firm’s research and development team was most affected by the staff cuts.

Related: AAX clients storm exchange’s office in Lagos following operations halt

The latest staff layoffs follow another wave of layoffs in Aug. 2022, which saw 74 employees leaving the firm, accounting for 21% of its staff at the time. 

In August, Harper said the company “grew too fast” in 2021 when the market peak, but “we are simply far larger than we need to be to operate and grow.”

Digital Surge halts withdrawals

Meanwhile, another Australian-based trading platform Digital Surge, which halted withdrawals on Nov. 16, has been another company in Australia impacted by the FTX contagion.

The crypto exchange confirmed on Nov. 16 that it has suspended deposits and halted withdrawals, promising customers they’d give more details within two weeks.

However, as at the time of writing, the company has yet to provide any further information publicly.

Cointelegraph has reached out to Digital Surge for comment but has not received an immediate response.

Update 8:30am UTC Dec. 5: Corrected a statement on the percentage of Swyftx employees laid off.

Customer support staff swamped during market swings — exchange execs

Binance Australia’s CEO says it is imperative that customer support is ready for a large influx of customer inquiries at any moment.

Crypto market turbulence can be an immensely stressful time for customer support staff at crypto exchanges, with companies vastly bolstering headcounts just to meet demand during surges. 

Speaking to Cointelegraph, Alex Harper, co-founder and CEO of Australian crypto exchange SwyftX said that “no matter what your role title is […] no one was above customer support at Swyft.”

He said that he, along with staff members from human resources and the CFO have had to work late into the night on occasion to assist their customer support teams when markets go crazy, explaining:

“Elon Musk quotes posts about Dogecoin, you get seven times daily signups”.

Harper explained that SwyftX strives for a two-minute response time, “given customers need to have questions answered and understand things.”

He also noted that their customer staff team now makes up over a third of their headcount, offering the ability to provide 24/7 support.

Leigh Travers, CEO of Binance Australia, told Cointelegraph that Binance’s customer support team has “expanded” to keep up with customer demand, and given how new cryptocurrency is for even those working in customer support, investing in their training and development is a priority.

Travers suggested that customer support departments are prioritized in the company, describing them as “the window to the entire Binance platform,” recognizing their work as vital to the success of the company.

“Team leaders and country managers participate in a user centric training program to understand the role of customer support and protect users and receive first hand customer experiences.”

Travers explained that due to unpredictable events in the crypto market such as the Terra Luna and UST “unwind” causing a dramatic “spike” in demand for customer support; it’s imperative that the customer support team are ready for a large influx of customer inquiries at any moment.

Travers said he has also jumped behind the deck of the Binance chat support and directly “responding to user inquiries,” in order to better understand how it works behind the scenes, adding this was a vital part of ensuring customer support can match the demand.

Related reading: Mental health and crypto: How does volatility affect well-being?

Travers explained that when markets stabilize customer support staff take advantage of the down period to utilize the “quieter time” creating “explainer blogs and FAQs to give users better easily accessible information.”

He added that the onboarding process can be the most demanding for customer support workers “regardless of the market conditions, including whether it’s a bull or bear market” their customers always “want to be onboarded quickly and efficiently.”

Customer support gets swamped during market swings — Exchange execs

Binance Australia’s CEO says it is imperative that customer support is ready for a large influx of customer inquiries at any moment.

Crypto market turbulence can be an immensely stressful time for customer support staff at crypto exchanges, with companies vastly bolstering headcounts just to meet demand during surges. 

Speaking to Cointelegraph, Alex Harper, co-founder and CEO of Australian crypto exchange SwyftX, said that “no matter what your role title is […] no one was above customer support at Swyft.”

He said that he, along with staff members from human resources and the chief finance officer have had to work late into the night on occasion to assist their customer support teams when markets go crazy, explaining:

“Elon Musk quotes posts about Dogecoin, you get seven times daily signups”.

Harper explained that SwyftX strives for a two-minute response time, “given customers need to have questions answered and understand things.”

He also noted that their customer staff team now makes up over a third of their headcount, offering the ability to provide 24/7 support.

Leigh Travers, CEO of Binance Australia, told Cointelegraph that Binance’s customer support team has “expanded” to keep up with customer demand, and given how new cryptocurrency is for even those working in customer support, investing in their training and development is a priority.

Travers suggested that customer support departments are prioritized in the company, describing them as “the window to the entire Binance platform,” recognizing their work as vital to the success of the company:

“Team leaders and country managers participate in a user centric training program to understand the role of customer support and protect users and receive first hand customer experiences.”

Travers explained that due to unpredictable events in the crypto market such as the Terra Luna Classic (LUNC) and TerraUSD Classic (UST) “unwind” causing a dramatic “spike” in demand for customer support; it’s imperative that the customer support team are ready for a large influx of customer inquiries at any moment.

Travers said he has also jumped behind the deck of the Binance chat support and directly “responding to user inquiries,” in order to better understand how it works behind the scenes, adding this was a vital part of ensuring customer support can match the demand.

Related reading: Mental health and crypto: How does volatility affect well-being?

Travers explained that when markets stabilize customer support staff take advantage of the down period to utilize the “quieter time” creating “explainer blogs and FAQs to give users better easily accessible information.”

He added that the onboarding process can be the most demanding for customer support workers “regardless of the market conditions, including whether it’s a bull or bear market” their customers always “want to be onboarded quickly and efficiently.”

1M Aussies will enter crypto over the next 12 months — Swyftx survey

The findings come from the Annual Australian Crypto Survey, commissioned by Australian crypto exchange Swyftx.

Approximately one million Australians will purchase cryptocurrency for the first time over the next 12 months — bringing total crypto ownership in the country to over five million — according to a newly released survey.

The findings came from Australian crypto exchange Swyftx’s second Annual Australian Crypto Survey, which was conducted by research firm YouGov.

The survey questioned 2,609 Australians over 18 years of age in early July, with 548 of the survey sample identified as current holders of cryptocurrency.

The report stated that despite the current “Crypto Winter,” which has seen approximately $2 trillion in assets wiped from the digital assets market over the course of the last year, Australian crypto ownership has grown 4% year-on-year, reaching 21% in 2022.

According to the report, this figure is set to increase by another one million new crypto owners in 2023, while at least one-quarter of Australians are planning to buy crypto over the next 12 months, with Millenials, Gen Zers, Aussie parents and those working full-time most likely to buy. 

Source: Annual Australian Crypto Survey, Swyftx

This finding is broadly in line with recent data from a Bitcoin processor suggesting the crypto winter isn’t holding back widespread adoption and comments from crypto exchange CoinJar’s head of content Luke Ryan claiming that sports sponsorship is helping to legitimize crypto in Australia.

Commenting on the bullish figures for crypto adoption and ownership, Swyftx’s head of strategic artnerships, Tommy Honan told Cointelegraph: 

“On the basis of current growth trajectories in the use of digital assets, we expect half of the adults under 50 in Australia to own or have owned crypto within the next one to two years.”

However, Honan said there were also a lot of variables that make forecasting adoption “fiendishly difficult,” adding: 

“The expectation is that we’ll see crypto move into the regulated space next year and, all other things being equal, you’d expect that to trigger growth in adoption, but it isn’t a given.”

Honan said the rate of adoption may slow over the next 12 months before recovering again as market conditions improve.

“The bear market has knocked confidence […] Confidence can take the stairs up and the lifts down, so we are going to have to wait and see how quickly the market takes to stabilize,” he noted. 

According to the survey, lack of sound regulation was revealed as the biggest deterrent to investing in crypto for those who have not yet done so, along with a lack of knowledge about how crypto works and overall market volatility.

Related: Institutional investors headed for a tipping point on crypto — Apollo Capital

This finding is reinforced by recent comments from the former head of risk at Credit Suisse CK Zheng, who believes the next crypto bull run will be a result of “regulatory clarity” in the United States.

In a comment to Cointelegraph, Swyftx co-CEO Ryan Parsons said the report shows there’s clear demand among Australians to purchase and use crypto, but that a “material factor” for crypto hesitancy remains regulation. 

“The drumbeat for defined rules is growing and it will continue to grow if adoption of digital assets increases at its current rate. As this report shows, there’s clear demand among Australians to purchase and use crypto. It is imperative we meet this demand responsibly.”

Aussie exchange Swyftx cuts staff by 21% amid bear market

Australian crypto exchange Swyftx highlighted inflation, a recession, and the bear market as the reasons behind the unfortunate lay-offs.

Australian crypto exchange Swyftx has had to lay off 21% of its staff to lower costs as it wades through the current bear market.

According to a Wednesday note from co-CEOs Alex Harper and Ryan Parsons, it stated that 74 colleagues had to be let go, as the current economic climate that they were hired in has shifted dramatically to what it is today:

“As you’re all aware, we are operating in an uncertain business environment, with levels of domestic inflation not seen in over two decades, rising interest rates, highly volatile markets across all asset classes, and the potential for a global recession.”

“We want to be very clear that impacting our teammates in this way is a last resort and is not, in any way, a reflection of the talent or commitment of those individuals,” they added.

A spokesperson from Swyftx explained the decision a little further to Cointelegraph, noting that “this was a hard decision but a prudent one that ensures our costs are compatible with this extended period of economic uncertainty.”

“We are deeply grateful for everything the team members who are leaving us have done and we’re working to support them through this extremely hard period,” they said.

Swyftx joins a long list of crypto firms to have suffered growing pains as a result of the hefty downward trend in crypto this year, with United States exchanges Coinbase and Gemini both slashing their headcount by 18% and 20% over the past couple of months.

In June, the crypto exchange announced it will be merging with the Australian online investing platform Superhero as part of a $1.5 billion merger which is expected to complete around mid-2023. 

At the time, Superhero co-founder John Winters said that the two platforms will operate independently of each other and that no job losses are expected as part of the merger. 

Related: Crypto ad spending may be down, but awareness remains critical: Experts

The announcement also follows a major employee cull from Singapore-based exchange Crypto.com, which laid off 260 people in June, equating to 5% of its employee base.

According to various unconfirmed reports online this week, the figure could be as high as 1,000, although it’s worth noting that this information was supplied by unnamed sources that claim to be close to the matter.

Aussie FPA supports ‘crypto rule book’ and regulation of exchanges

Swyftx co-CEO Ryan Parsons echoed the calls from the FPA, noting that “Our preference is for crypto platforms to operate within the existing financial services licensing framework.”

The Financial Planning Association of Australia (FPA) has shown its support for the “crypto rule book” idea and called for regulating exchanges instead of crypto assets.

In May, the Australian Law Reform Council (ALRC) proposed to tackle crypto regulation through a rule book-style framework that sets out a series of gradually updated compliance principles for local crypto firms to adhere to.

The comments came via a submission to the Treasury by FPA’s head of policy, strategy and innovation, Ben Marshan, who also argued that the regulation of crypto exchanges should fall under the current financial services regime and not under a new separate legal framework.

“Firstly, it would create an alternate, duplicate regulatory regime to regulate what, at the core, is the purchase and holding of a financial asset to either retail or wholesale investors.”

“Secondly, it would require existing financial service licensees to apply for and hold a separate type of license, adding to cost and regulatory duplication,” he added.

Mashan also emphasized a need to roll out greater consumer protections for local Australian crypto users and highlighted that regulating secondary providers (crypto exchanges, brokers etc.) is the best way to do this.

“The regulation of a financial product or service should not depend on the technology, which underlies the asset,” he said, adding that “it would be virtually impossible to regulate the product because it’s so decentralized, they’re in all sorts of foreign jurisdictions.”

Focusing regulation on crypto service providers will remove a lot of “complexity” from the equation, given the rapidly evolving nature of blockchain tech and crypto, argued Mashan, adding that the ALRC’s crypto rule book idea for firms to follow “makes sense.”

“It makes it a lot easier because instead of having to work your way through thousands of pages of the Corporations Act, people can go to a specific section, and it’s much more efficient.”

Speaking with Cointelegraph, Ryan Parsons, the co-CEO of local crypto exchange Swyftx, echoed the calls from Mashan and noted that his firm wants to see “sensible measures that support consumer protections” enacted soon so that Australia doesn’t risk falling behind the United States and European Union:

“Our preference is for crypto platforms to operate within the existing financial services licensing framework, albeit in a way that accounts for the unique characteristics of digital assets.”

“We think this is the best way to reduce complexity and cost, as well as build confidence in crypto as an asset class among Australian investors,” he added.

Related: Chainalysis tips Australia will crack down on misleading crypto ads

Another key idea highlighted in the ALRC’s report was to introduce the Twin Peaks regulatory model, in which regulation is split between one entity that is tasked with overseeing the maintenance of financial system stability while the other takes care of institutional market conduct and consumer protection.

The same model is used in Australia’s financial regulatory system, with the Australian Securities and Investments Commission (ASIC) in charge of good market conduct and consumer protection, while the Australian Prudential Regulation Authority (APRA) is responsible for financial system stability.

Since the Liberal party was emphatically booted out of government in May, the regulatory landscape of crypto in Australia has become uncertain as the Labor party appears to have other fish to fry.

As it stands, Labor is yet to provide any concrete initiatives but has outlined that introducing greater consumer protections in crypto will be a key area of focus.

Crypto-stock trade pairs in the cards as Swyftx inks $1.5B merger with Superhero

Speaking to Cointelegraph on Wednesday, Swyftx co-CEO Ryan Parsons revealed that its long-term plans are to explore ways to offer trading between traditional and crypto asset classes.

Australian crypto exchange Swyftx wants to eventually offer seamless trading between traditional and crypto-asset classes, with its first step being the completion of its $1.5 billion merger deal with online investing platform Superhero. 

The deal to combine the two was revealed on June 8, with the merged entity set to become the first in Australia to offer both decentralized and traditional finance.

Speaking to Cointelegraph on Wednesday, Swyftx co-CEO Ryan Parsons revealed that one of its longer-term goals is to explore “greater interoperability between asset classes.”

“You can imagine customers trading their Bitcoin or other digital assets for equities in listed companies like Tesla, and vice versa.”

Parsons said that its first priority will be to work with regulators and set up appropriate customer protections:

“But it’s important to be clear that we’re working through all the regulatory requirements in what is already a quickly evolving regulatory landscape. We’re extremely keen to ensure that whatever we do, is done properly with appropriate customer protections in place.”

Related: Aussie consumer group calls for better crypto regs due to ‘lagging laws’

While the merger news appeared to come without any prior warning, Parsons said it was “no surprise” that a number of equity trading platforms have been looking to offer crypto trading and vice versa, and that discussions with Superhero about a merger had been underway for several months prior:

“The two teams have been actively talking for a few months, with the merger following out of initial discussions around the potential for a crypto-equities partnership opportunity. It just made more sense to join forces than to be partners.”

Co-founded by Alex Harper and Angus Goldman in 2018, Swyftx is an Australian crypto exchange, offering 320 digital currencies and crypto interest-earning products. The company’s exchange saw a banner year in 2021, growing its investor base by nearly 1,200% to over 600,000 retail and corporate investors.

Superhero, an online broker, was founded in the same year, but launched only in late 2020. Over the last 12 months, the company has grown its investor base by more than 600% to over 200,000 investors, allowing them to trade Australian and U.S. stocks, as well as manage their Superhero superannuation (Australia’s version of 401K) a product launched in July 2021.

In a statement on June 8, Swyftx said the completed merger would create a combined customer base of 800,000 when it’s completed around mid-2023.

The combined platform will allow customers to trade and invest across cryptocurrencies, equities and superannuation. Later, Parisons said the company wants to build out its product offerings, which could include banking-type services or other traditional finance products and services.

Following the merger, Swyftx co-founder Alex Harper and current Swyftx CEO Ryan Parsons will become co-CEOs of the combined entity. John Winters will head up the traditional financial services arm and take a position on the board of directors.

Winters told the Sydney Morning Herald on Tuesday evening that there was a possibility of listing the combined entity on the Australian stock exchange once the merger is tied off, but said there would be “a lot of work to be done before we get to that stage.”

Winters stated that, for the time being, the two platforms will continue to operate independently of each other, and no job losses are expected as part of the merger.

Fed money printer goes into reverse: What does it mean for crypto?

What will happen to the crypto markets when quantitative tightening takes full effect and the Federal Reserve shelves the money printer?

The United States Federal Reserve is starting the process of paring back its $9 trillion balance sheet that ballooned in recent years in a move called quantitative tightening (QT). 

Analysts from a crypto exchange and financial investment firm have conflicting opinions about whether QT, starting on Wednesday, will put an end to a decade of unprecedented growth across crypto markets.

Laypeople can consider QT the opposite of quantitative easing (QE), or money printing, which the Fed has been engaged in since the start of the COVID-19 pandemic in 2020. Under QE conditions, more money is created and distributed while the Fed adds bonds and other treasury instruments to its balance sheet.

The Fed plans on shrinking its balance sheet by $47.5 billion per month for the next three months. In September of this year, it plans on a $95 billion reduction. It aims to see its balance sheet reduced by $7.6 trillion by the end of 2023.

Pav Hundal, manager at the Australian crypto exchange Swyftx, believes that QT could have a negative impact on markets. He told Cointelegraph on Wednesday that “it’s very possible thatyou might just see growth in market cap trimmed slightly:”

“The Fed is culling assets harder and faster than a lot of analysts had expected and it’s difficult to imagine that this won’t have some kind of impact on investor sentiment across markets.”

Initiated in March 2020, the impact of QE on the crypto market was dramatic. CoinGecko data shows that the crypto market cap languished through 2019 and early 2020, but a vibrant bull market began in late March 2020 as the money printer fired up. The total crypto market cap burst from $162 billion on March 23, 2020, to a peak of just over $3 trillion last November.

Over a similar time frame, the Fed balance sheet increased 2.1 fold from $4.17 trillion on January 1, 2020, to $8.95 trillion on June 1, 2022. That is the fastest rate of increase since the last global financial crisis starting in 2007.

Related: UN agency head sees ‘massive opportunities’ in crypto: WEF 2022

Financial advisory firm deVere Group CEO Nigel Green believes market reactions to QT will be minimal because “it’s already priced in.” Green said there may be a “knee-jerk reaction from the markets” because of the unexpected speed with which QT is being rolled out, but he sees it as a little more than a wobble:

“Furthermore, we expect a market bounce imminently, meaning investors should be positioning portfolios to capitalise on this.”

Wage increases among American workers, especially in the hospitality industry, have already been observed as labor demand remains high. Assuming wages remain high through QT, the U.S. may emerge from the economic downturn with lower income inequality. Crypto market analyst Economiser explained in a Tuesday tweet that if people wind up with more cash in their pockets from their higher wages, “the crypto market could ultimately benefit” from QT.

Hundal added that while markets are experiencing increased volatility lately, Bitcoin (BTC) could benefit as it is now demonstrating its position as a bellwether asset. He noted that Bitcoin dominance is currently at about 47%, up by eight percentage points from the start of 2022. He said, “There are different ways to interpret this,” adding:

“It does suggest that market participants are seeking to park value in Bitcoin, meaning we could see weakness continue to trend across alt coin markets if current market conditions continue to play out.”