Tuesday, December 5, 2023

Nigerian tech startup Nestcoin lays off workers amid FTX woes

The one-year-old startup said it held its assets (cash and stablecoins) at the now-defunct crypto exchange to manage operational expenses.

• November 14, 2022

African web3 startup Nestcoin has laid off some of its workforce following the financial woes that befell the famous digital exchange platform FTX Group last week.

In a statement seen by Peoples Gazette on Monday, CEO Yele Bademosi explained that  FTX’s fall affected his one-year-old startup, which held its assets (cash and stablecoins) at the now-defunct crypto exchange to manage operational expenses.

“Last week’s event has 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. As a leadership our immediate priority is to conduct this tough task in a compassionate manner and with respect to our departing colleagues.”

The Gazette had on Friday reported that Nigerian cryptocurrency exchange platforms BT Pesa Nigeria Ltd. and B Payment Services, both linked with now defunct FTX Group, were named among 134 FTX affiliate enterprises that filed for voluntary bankruptcy.

Since Sam Bankman-Fried’s crypto empire collapsed last week, there have been rumours that corporate investments were trapped on FTX, its crypto trading platform.

Nestcoin is one of a select group of startups that have received funding from FTX and Alameda Research, sponsoring the web3 firm with offices in Kenya and Nigeria.

FTX on the other side, led the $150 million Series C expansion round in Chipper Cash, an African payments platform.

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