Nestcoin lays off employees; hit by FTX demise

Nestcoin, a Nigerian based crypto startup, announced that it has laid off some of its employees due to FTX demise. FTX filed for bankruptcy when its acquisition agreement with Binance fell through and the CEO Sam Bankman-Fried resigned.

According to Nestcoin CEO Yele Bademosi, who made this announcement in a tweet, a couple of hours ago, the startup had to let go of some of its employees because of the adverse impact of FTX demise on its business. The company held its assets (cash and stablecoins) at FTX to manage its operational expenses.

“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 – 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 o 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.”

Yele adds that the immediate priority for the company is to conduct the task of letting go of some of its employees in a compassionate manner and with respect to the departing colleagues.

Founded in 2021 by CEO, Yele Bademosi, Nestcoin is a web3 application company that builds, operates, and invests in crypto-native products.

It is rumoured that as least 30 employees were affected by this layoff exercise. The remaining staff might have their salaries slashed by as much as 40%.

Nestcoin announced that it raised $6.45 million in pre-seed capital in February 2022 to enable the company to expand its global operations and invest in building products that will help accelerate crypto adoption and financial freedom for people in frontier markets. Metaverse Magna, a crypto-gaming DAO launched by Nestcoin, raised $3.2 million in a seed sale token round some months ago.