Brisbane-based cryptocurrency exchange, Swyftx, and shares trading and superannuation platform, Superhero, have abandoned a merger deal they agreed to earlier in June. The deal was supposed to create “a $1.5 billion financial services giant” through the integration of platforms.

Swyftx, Superhero Merger Plan to Create Crypto Giant Shelved

Announcing the deal in June, Swyftx described it as “a historic merger that will create the country’s first digital and traditional finance powerhouse.” However, the Australian Financial Review reports that both firms have decided to jettison the deal, citing Australia's unfavorable digital asset regulation.

“The policy environment has changed significantly since we announced the merger, and neither party has been able to realize the vision of the merger in any meaningful way,” Alex Harper, Swyftx’s CEO, said in a statement cited by the outlet. Harper added that customers might get no benefits from the merger until 2024, hence the decision was taken “in the best interests” of the customers and both entities.

The cancellation of the merger comes about a month after Swyftx insisted that the merger was still on track after concerns emerged about the Australia-based crypto exchange’s capital raise following the collapse of FTX. However, the exchange said the raise was for its global expansion.

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Crypto Regulatory Landscape in Australia Still Active despite Swyftx, Superhero About-Face

Meanwhile, in October, the Australian Securities and Investment Commission (ASIC) sued BPS Financial for alleged misleading statements about its token Qoin. The regulator, which described digital assets as “highly volatile, inherently risky, and complex,” also recently sued the crypto exchange, Block Earner and comparison platform Finder.com for alleged misconduct.

However, the Australian government announced last week that it will establish a framework for the licensing and regulation of crypto service providers in 2023. The government said it wants to “ensure additional safeguards for Australians.”

“The next steps in the Government’s ongoing ‘token mapping’ work will include the release of a consultation paper in early 2023 to inform what digital assets should be regulated by financial services laws, and the development of appropriate custody and licensing settings to safeguard consumers,” the country's Treasury explained in a statement.