Due to the failure of FTX, the second-largest cryptocurrency exchange in the world, Nigerian company Nestcoin may have lost all of its cash and stablecoin holdings.
Nestcoin stated that in light of this development, it will be necessary to lay off certain employees while it restructures its business plan.
However, the business emphasized that the event has no financial impact on its clients and pointed out that the products Nestcoin has so far published are Defi protocols and non-custodial in nature. As a result, it has never kept client monies.
Yele Bademosi, a co-founder of Nestcoin, referred to the scenario as difficult for the business and the whole crypto industry in a statement to investors.
What Really Transpired
According to the corporation, its aim of recovering a sizable chunk of its stablecoin investment that was stored on the FTX Exchange is now in jeopardy.
Bademosi provided an update on how the demise of FTX affected Nestcoin, saying:
“Last year, Nestcoin raised capital from a range of investors, including Alameda Research. For context, Alameda’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 – 1.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. Unfortunately, this means saying goodbye to some of our very talented Nesters.”
Impending Job Losses
The number of employees who will be laid off was made public, but Bademosi stated that the leadership team at Nestcoin's top objective right now is to carry out the difficult task of doing so with compassion. He stated:
“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 crypto products. To succeed, we will remain relentless, resourceful, and flexible as we navigate these hard times.”