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The tie-up between Swyftx and Superhero only lasted six months. From left Alex Harper and Angus Goldman from Swyftx,and John Winters,Wayne Baskin from Superhero.Credit:Flavio Brancaleone

The scrapping of the deal reflects major shifts in both of the markets each group operates in.

Earlier this month,Brisbane-headquartered Swyftxlaid off 40 per cent of its staff amid a deterioration in cryptocurrency markets following the collapse in values across a range of digital assets,as well as the collapse of exchange FTX.

Swyftx in November revealed it was hunting for a short-term capital injection to bolster its balance sheet. It was a sharp reversal in fortunes for Swyftx from 2021 when itstruck sponsorship deals with the NRL and AFL’s Brisbane Lions.

Superhero has also had to tackle regulatory intervention and market changes. The company was founded in 2020 at the height of the pandemic-inspired youth share trading boom when platforms like America’s Robinhood were hugely popular. However,interest from youth traders in buying shares and crypto has reduced over the past 12 months.

The tie-up between Superhero and Swyftx has been particularly hampered by thecorporate regulator’s warning in August to local online share trading platforms about their plans to incorporate cryptocurrency investing options into their offerings,while marketing themselves as a “low cost” or “no cost” broker.

That warning signalled a new approach from the Australian Securities and Investments Commission (ASIC),which has long insisted it could not regulate cryptocurrency because it was not a financial product.

The demerger will take place via a management buyout that will return Superhero to the ownership of its founders John Winters and Wayne Baskin,and other backers.

Winters said the demerger was in the best interest of the companies and their customers.

“The volatility in the market as well as the current regulatory environment has made it increasingly difficult to achieve the initial vision that inspired the merger earlier this year.”

Winter said 2023 was looking up for the group. “Compared to 2021,Superhero’s trading volumes are up just over 20 per cent year-on-year. This is incredibly pleasing to see,especially when considering the challenging market conditions we’ve seen in 2022.”

Alex Harper,who co-founded Swyftx with friend Angus Goldman,described the demerger as a disappointing outcome.

“Ultimately,we took this decision in the best interests of both Superhero and Swyftx,as well as their customers.”

“The policy environment has changed significantly since we announced the merger and neither party has been able to realise the vision of the merger in any meaningful way.”

Harper added that the merged group was facing the prospect that there would be no realised benefits from the tie-up until 2024 at the earliest.

“Under these circumstances,we felt it best to focus on our core offering,” Harper said. “The decision puts Swyftx in a strong position and frees us up to focus on consolidation and growth opportunities in digital assets.”

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