Nestcoin, a Nigerian web3 startup, has laid off some employees as FTX’s recent bankruptcy has impacted its business.
The platform was launched last February to build, invest and operate web3 and non-custodial products for customers in frontier markets across Decentralized Finance (DeFi), media, digital art, and gaming.
Yele Badamosi, CEO of Nestcoin, shared a statement via his Twitter account that FTX’s fall from grace has affected his one-year-old startup, which held assets (cash and stablecoins) in the now-defunct crypto exchange to manage operational expenses.
The FTX pummel into bankruptcy has tilted the trajectory of the cryptocurrency market. Beyond the market, it has provoked a profound catastrophe in major organizations with funds stuck on the exchange, thus doubling the doom that has emerged out of cryptocurrency this year.
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NestCoin Makes goodbye to Nesters
Last week’s liquidity turbulence has ensured a $6 billion ditch in the FTX’s exchange balance sheet, pushing the company to file for Chapter 11 bankruptcy proceedings on the 11th of November. NestCoin, on the back of the effect of FTX’s bankruptcy, put out a post today stating the following:
Dear investors,
We are reaching out to share an update on the FTX incident and its impact on Nestcoin. Last year, Nestcoin raised capital from a range of investors, including Alameda Research. For context, Alamanda’s equity is less than 1%. We used the closely-associated exchange, FTX, as a custodian to store a significant proportion of the stablecoin investment we raised- i.e our day-to-day operational budget.
However, last week’s events have had an impact on us, as we held our assets (cash and stablecoins) at FTX to manage our operational expenses. We were not undertaking any trading but simply custodied our assets on the FTX exchange. While there are uncertainties, including the outcome of our assets held at FTX, we as a company have to adjust our plans, rethink our strategy and take steps to better position ourselves for the future,” the statement reads in part.
Unfortunately, this means saying goodbye to some of our very talented nesters.
Yele Badamosi
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“While this is a challenging time for us and the industry as a whole – we see this as a wake up call to focus on building a more decentralized crypto future where no one organization or person can amass enough power to influence a nascent industry that has the potential to do good.
“In the past few days I’ve strengthened my resolve and remain committed to “doing crypto” in line with its true spirit and founding ethos.”
“At Nestcoin, we have a renewed sense of purpose — we realize that for crypto to truly go mainstream, we must accelerate the transition to self-custody by building compelling trustless crypt products. To succeed, we will remain relentless, resourceful and flexible as we navigate these hard times,” Yele Badamosi’s statements conclude.”
Techcrunch reports that Nestcoin has had to reduce its headcount after the announcement. The sources familiar with the matter said that the remaining employees would see their salaries slashed by as much as 40%.
The report says Nestcoin layoffs will affect at least 30 employees from sub-departments, including Breach, its media arm; Brunch, a group messaging app with a crypto wallet; and Metaverse Magma (MVM), a gaming DAO.
Read Also: Binance to start Recovery Fund for crypto projects in crisis
Nestcoin is the latest publicized victim of the recent FTX crash. How many more companies will be discovered later in the week to have been affected hugely by FTX’s sudden crash? The next few days are ones to watch out for.
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