Swyftx cuts 40% of staff as it braces against 'worst-case scenario'

Published at: Dec. 5, 2022

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 40% 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.

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.