Nigerian Crypto Startup Loses Stablecoins To FTX Collapse

Nigerian crypto startup, Nestcoin has confirmed it lost its stablecoins to the collapse of FTX, the second-largest cryptocurrency exchange in the world.

Recall that Bankman-Fried resigned as CEO of FTX last week as the company, along with over 100 affiliated entities, commenced  bankruptcy proceedings, in the wake of a liquidity crisis that led to the collapse of FTX, one of the world’s largest crypto exchanges.

Bankman-Fried, in a statement, said, the company saw about $5 billion of withdrawals in one day after Changpeng Zhao, CEO of rival Binance, announced that his firm would sell all of its holdings in the FTX crypto token.

Multiple news outlets later reported that FTX lent billions of dollars to Alameda, including some customer funds.

The price of FTX’s token fell 86 per cent in three days following the withdrawals and sent bitcoin, ethereum and shares of exchange Coinbase tumbling below 20 per cent.

Binance briefly moved to acquire FTX on Tuesday to help cover the liquidity crunch, but the company later pulled out of the agreement, citing due diligence and news reports regarding mishandled customer funds and alleged US agency investigations, setting the stage for FTX to declare bankruptcy.