The downfall of FTX, the second-largest digital currency exchange globally, might have led to the loss of all the funds and stablecoin resources maintained by Nigerian firm Nestcoin.
Nestcoin mentioned that in light of this occurrence, it will be essential to downsize its workforce as it reorganizes its business strategy.
Nevertheless, the company stressed that the event has no fiscal effect on its customers and highlighted that the offerings Nestcoin has introduced so far are Defi protocols and non-custodial in essence. Consequently, it has never held client assets.
Yele Bademosi, a co-founder of Nestcoin, labeled the scenario as challenging for the company and the broader crypto sector in a communication to investors.
As per the firm, its aspiration to reclaim a significant share of its stablecoin investment that was kept on the FTX Exchange is now at risk.
Bademosi shared an overview of how the failure of FTX impacted Nestcoin, stating:
“Last year, Nestcoin secured funding from a diverse group of investors, including Alameda Research. For context, Alameda’s equity is less than 1%. We utilized the closely-associated exchange, FTX, as a custodian to hold a considerable portion of the stablecoin investment we acquired – i.e., our day-to-day operational budget.”
“However, the occurrences from last week have affected us, as we stored our assets (cash and stablecoins) at FTX to manage our operational expenditures. We were not engaging in any trading, but simply safeguarding our assets on the FTX exchange.
“While there are uncertainties regarding the fate of our assets held at FTX, we as a company must adjust our plans, reevaluate our strategy, and take measures to better position ourselves for the future. Regrettably, this entails bidding farewell to some of our exceptionally skilled Nesters,” he added.
The quantity of employees to be laid off was disclosed, but Bademosi remarked that the leadership team at Nestcoin’s primary objective right now is to carry out the challenging task of doing so with empathy.
He stated:
“While this is a tough period for us and the industry as a whole, we perceive this as a crucial moment to emphasize the development of a more decentralized crypto future where no single entity or individual can gather enough influence to steer a budding industry with the potential for positive change.
“In the last few days, I’ve bolstered my determination and remain dedicated to “doing crypto” in accordance with its authentic spirit and foundational principles. At Nestcoin, we possess a renewed sense of direction – we recognize that for crypto to genuinely mainstream, we must accelerate the shift to self-custody by creating appealing trustless crypto solutions. To thrive, we will remain tenacious, inventive, and adaptable as we navigate these challenging times.”
