The cryptocurrency exchange Australia-based Swyftx has laid off a total of 90 staff members, which it said is preparation for the “worst case scenario” caused by the fall of FTX and a potential drop in global trade volumes on next year.
The news was shared by Swyftx co-CEO Alex Harper in a December 5 statement, noting that, despite not having any exposure to FTX, the firm was “not immune” to the fallout from the exchange’s failure, adding:
“As a result, we need to prepare in advance for the worst case scenario of further significant declines in global trade volumes during the first half of next year and the potential for more black swan events.”
A Swyftx spokesperson told Cointelegraph that the 35% headcount cut also came in anticipation of falling trade volumes, even though these numbers increased in November.
“We have laid off staff in anticipation of a potentially sharp drop in global trade volumes in the first half of 2023 and further aftershocks from the FTX collapse,” the spokesperson said.
In the statement, Harper said the tough decision was necessary to get through the protracted crypto winter:
“Our business is exceptionally well positioned to weather events like the FTX debacle. […] But as much as we want to, we don’t exist in isolation from the market, which is why we’re acting fast 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 collapse of FTX, and added:
“For clarity, I should say that we do not have any exposure to FTX. We hold client funds 1:1 and do not lend client assets to third parties.”
Harper also revealed that his company would become more risk-averse in its business decisions and that headcount cuts would ease operating costs on its balance sheet.
“Swyftx maintains strong revenue, but we are not willing to take any chances after FTX’s collapse; we are being exceptionally cautious about next year’s costs,” the spokesperson added.which also noted that priority areas such as security, compliance and customer services would not be affected.
As for who was fired, A Swyftx spokesperson told Cointelegraph that the firm’s research and development team bore the brunt of the staff cuts.
The latest layoffs come after another wave of layoffs in August 2022, in which 74 employees left the company, which represents 21% of its workforce at that time.
In August, Harper said the company “grew too fast” in 2021, when the market peaked, but “we’re just way bigger than we need to be to operate and grow.”
Digital Surge stops withdrawals
In the meantime, another Australian-based trading platform, Digital Surge, which halted withdrawals on November 16, is another Australian firm affected by the FTX contagion.
The cryptocurrency exchange confirmed on Nov. 16 that it had suspended deposits and stopped withdrawals, promising clients that they would give more details in two weeks.
Nevertheless, as of this writing, the company has yet to provide any further information publicly.
Cointelegraph has contacted Digital Surge for comment but has not received an immediate response.
Update 8:30am UTC Dec 5: Fixed a statement regarding the percentage of Swyftx employees laid off.
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