Swyftx cuts 40% of staff as it braces for ‘worst case scenario’

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

The news was shared by Swyftx co-CEO Alex Harper in a statement on December 5, noting that despite having no exposure to FTX, the company was “not immune” to the fallout from the bankruptcy filing, adding:

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

A spokesperson for Swyftx told Cointelegraph that the 40% drop was also in anticipation of a drop in trading volume, despite those numbers increasing in November.

“We have let go of staff in anticipation of a potentially sharp drop in global trading volumes in the first half of 2023 and further aftershocks from FTX’s collapse,” the spokesperson said.

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

“Our business is uniquely well positioned for weather events like FTX […] But as much as we’d like to, we don’t exist in isolation from the market, which is why we’re acting fast and early by significantly reducing the size of our team.”

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

“Just for clarity, I should say that we have no exposure to FTX. We hold customer funds 1:1 and do not lend customer funds 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 operating costs on the balance sheet.

“Swyftx maintains strong revenue, but we are not willing to take any risks post-FTX and are exceptionally cautious about costs next year,” added the spokesperson, who also noted that priority areas such as security, compliance and customer support services would not. 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 cutbacks.

Related: AAX customers storm the exchange’s office in Lagos after the shutdown

The latest layoffs follow another wave of layoffs in August 2022, which saw 74 employees leave the firm, representing 21% of the workforce at the time.

In August, Harper said the company “grew too fast” in 2021 when the market peaked, but “we’re simply way bigger than we need to be to operate and grow.”

Digital Surge stops withdrawals

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

The crypto exchange confirmed on November 16 that it has suspended deposits and halted withdrawals, promising customers that it would provide more details within two weeks.

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

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