It’s now emerging that the collapse of American crypto platform FTX last week has had an impact on Nigeria’s Web3 startup Nestcoin, even as its effects continue to be felt across the world.
Nestcoin CEO Yele Bademosi said that his startup held cash and stablecoins in the fallen crypto platform. Nestcoin is also a beneficiary of funding from FTX and its sister company Alameda Research.
“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,” Bademosi tweeted.
The CEO clarified that they were not undertaking any trading on the platform but used it simply as a custodian of a portion of its assets. Bademosi said that they have had to adjust their plans, “rethink our strategy and take steps to better position ourselves for the future.”
— YB (25,25) ⏳ (@YeleBademosi) November 14, 2022
Nestcoin was launched to build, invest and operate web3 and non-custodial products for customers in frontier markets across Decentralized Finance (DeFi), media, digital art and gaming. . The Nigerian startup has now reportedly laid off at least 30 employees following the cash crunch impact from the fall of FTX.
The company has however said that the incident had no financial impact on its customers.
“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 crypt products. To succeed, we will remain relentless, resourceful and flexible as we navigate these hard times.” he said.