FTX Crash: Yet Another Crypto Startup In The Red After Losing Assets

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It is no longer news that several crypto investment organizations have been terribly affected by the recent FTX developments. Some of them have either been forced out of business or forced to downsize.

Nestcoin- a Nigerian crypto startup is one out of many others to have suffered a terrible fate, after the collapse of the second-largest cryptocurrency exchange in the world. And as such, it is forced to take immediate actions in order to weather the storm, and remain in business. The first step will be to lay off a good number of its staff. This would result in yet another group of people joining the already saturated unemployment pool.

Immediately I read about the situation, my first thought was that a lot of investors would also bear the brunt of having lost all their money. However, Nestcoin has come out to state that no customers’ funds were lost in the process.

The company, however, stressed that the incident has no impact on its customers financially, adding that the products Nestcoin has released to date are Defi protocols & non-custodial in nature. As such, it has never held customer funds.
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In light of the most recent development, all the investors were notified by the Co-founder, in the person of Mr. Yele Bademosi,

Apparently, the company supposedly stored a huge chunk of its stablecoin investment on the FTX Exchange, and with the unfortunate crash, there is almost no hope of recovering all that it lost.

I fear how many more businesses will suffer, and how many more people would have to suffer the immense loss as a result. There have been times when I lost money as a result of bad investment decisions, and I have not yet moved past those mistakes.

“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, custodian to store a significant proportion of the stablecoin investment we raised – 1.e. Our day-to-day operational budget.”

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There is no indication whatsoever that Nestcoin and other organizations that lost assets will be regaining them anytime soon. As of now, we’d keep our fingers crossed.

In his(Bademosi) statement, he wrote;

“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.
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Thanks For Reading!

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