Crypto Startup Nestcoin Hardly Affected From FTX Crash

Nestcoin has acknowledged that the FTX collapse has affected the business since its operating funds are still locked up in the defunct cryptocurrency exchange.

According to a statement, Nestcoin retained some of the money it collected throughout its investment rounds in FTX. The sibling company of FTX, Alameda Research, participated in the $6.5 million pre-seed financing round in February as an investor.

Nestcoin CEO Yele Bademosi stated:

“Last year, Netcoins 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 portion of the stablecoin investment we raised — i.e., our day-to-day operation budget.”

The startup company claims it will need to change its plans due to losing access to the money. A 40% salary cut was implemented for the remaining employees, in addition to over half of its workforce being let go.

Additionally, some staff will be on furlough for up to two months. According to reports, Bademosi would not get paid as the business gets through this challenging time.

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