One of the biggest cryptocurrency exchanges in the world saw a rapid and shocking decline on Friday when FTX Trading filed for Chapter 11 bankruptcy.
Sam Bankman-Fried, the business’s founder and CEO, left the organization as well. John J. Ray III was chosen to take his place.
According to a statement released on Friday, Bankman-Fried intends to stick with FTX while it navigates the bankruptcy process.
This development has rocked a number of financial technology and as well as StableCoin companies in Africa, as many of them had assets invested in FTX.
As a result of this, these organizations are starting to take countermeasures to save their company from nosediving any further.
One such company affected by the FTX bankruptcy declaration is the Nigerian StableCoin company, NestCoin.
Last year Nestcoin raised funding from a range of investors including Almeda Research. For context, Alameda’s equity is less than 1%.
It used the closely associated exchange — FTX, as a custodian to store a significant proportion of the StableCoin investment raised.
Unfortunately, the company suffered a significant impact due to the outcome of last week’s event as they held their assets (cash and StableCoins) at FTX, not to undertake any tradings, but to manage operational expenses.
While there are uncertainties surrounding the outcome of the assets held at FTX, the company has decided to let go of some of its staff to better position itself for the future.
According to a press release on social media, founder and CEO, Yele Bademosi made the following statement:
“While this is a challenging time for us — we see this as a wake-up call to focus on building a more decentralized crypto future where no one organization can amass enough power to influence a nascent industry that has the potential to do good.”
He went on to say that in the past few days, he has strengthened his resolve and remains committed to doing crypto in line with its true spirit and founding ethos.
“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 crypto products. To succeed, we will remain relentless, resourceful and flexible as we navigate these hard times,” he added.
The questions remain, what is the possibility of this affecting other African platforms? Will other affected platforms also take the layoff route, or will the customers/users bear the brunt? We hope to see how this develops in the coming weeks.
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