FTX Collapse Triggers Layoffs at African Web3 Startup Nestcoin
Nestcoin lays off dozens of employees and slashes salaries after losing millions in the FTX bankruptcy. Other African startups like Chipper Cash and Mara confirm they avoid direct financial exposure to the fallen exchange.
Nestcoin, a prominent African web3 startup, lays off at least 30 employees and cuts remaining salaries by up to 40% due to the FTX collapse. CEO Yele Bademosi confirms in a letter to investors that the company holds operational funds, reportedly around $4 million, on the bankrupt crypto exchange. Like most FTX customers, Nestcoin currently cannot withdraw these trapped assets as the platform navigates bankruptcy proceedings.
Alameda Research, FTX's sister trading firm, holds a minor stake of less than 1% in Nestcoin after participating in the startup's $6.45 million pre-seed round. Several other African crypto companies, including Chipper Cash, Mara, VALR, Jambo, and Bitnob, also receive investments from FTX and Alameda. Industry speculation suggests the fallen exchange may have required portfolio companies to hold assets on its platform, though this condition does not apply to all funded startups.
While Nestcoin suffers significant losses, other African startups successfully avoid exposure to the collapsed exchange. Bitnob declines an FTX investment offer that required holding stablecoins in custody on the platform, while VALR, Mara, and Chipper Cash confirm they have zero assets trapped on FTX. Before its sudden downfall, FTX attracts millions of African users by offering an 8% annual interest rate on stablecoins, positioning itself as a crypto bank to aggressively compete with Binance for market share across the continent.