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FTX Collapse: Nigerian Web3 Startup Negatively Impacted, Forced to Downsize Workforce

By
Ojukwu Emmanuel
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0

Following the collapse of the FTX crypto exchange platform which has negatively impacted several companies across the globe, Nigerian Web3 startup Nestcoin has been forced to lay off part of its workforce.

The one-year-old startup disclosed it used the FTX platform as a custodian to store a significant proportion of its investment, which has seen its assets held due to the collapse, noting that it necessitated the firm to downsize its workforce to be able to manage its operational expenses.

The startup CEO Mr. Yele Badamosi took to his Twitter handle to inform investors about the firm’s next move, which he shared via a statement.

The statement reads in part,

“Dear investors,

“We are reaching out to share an update on the FTX incident and its impact on Nestcoin. Last year, Nestcoin raised capital from a range of investors, including Alameda Research.

“For context, Alamanda’s equity is less than 1%. 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.

“However, last week’s events have had an impact on us, as we held our assets (cash and stablecoins) at FTX  to manage our operational expenses. We were not undertaking any trading but simply custodied our assets on the FTX exchange.

“While there are uncertainties, including the outcome of our assets held at FTX, we as a company have to adjust our plans, rethink our strategy and take steps to better position ourselves for the future.

“Unfortunately, this means saying goodbye to some of our very talented nesters. While this is a challenging time for us and the industry as a whole – we see this as a wake-up call to focus on building a more decentralized crypto future where no one organization or person can amass enough power to influence a nascent industry that has the potential to do good.

“In the past few days, I’ve strengthened my resolve and remain 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 crypt products. To succeed, we will remain relentless, resourceful, and flexible as we navigate these hard times.

“We thank you for your support and strategic advice so far. As always, if you have any questions please feel free to reach out to me directly at yb@nestcoin.com”.

While the firm has made the move to reduce part of its workforce, reports reveal that the remaining team members will have their salaries slashed by 40%.

Nestcoin builds, operates, and invests in web3 applications, which is funded by 20 investors, and has raised a total of $6.5 million in funding over 1 round, which was a pre-seed round raised on February 2022.

The collapse of the FTX crypto exchange platform which has already filed for bankruptcy  has negatively impacted a large number of people and organizations which has seen them lose a substantial amount of cash.

It has also affected the cryptocurrency market, as the price of cryptocurrencies plummeted at the news of the collapse. Bitcoin lost more than 8% in value which saw it trade at $18,000 mark, while Ethereum tumbled by more than 16% to $1,200.

It has been predicted that the prices of crypto could end up plummeting below $10,000 before the end of the year, due to concerns from investors.

Crypto.com Delays Withdrawals Amidst Insolvency Rumbling The Cryptocurrency Industry

By
Paul Ugbede Godwin
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1

Following the Bankruptcy of crypto exchange FTX, many centralized exchanges have been facing liquidity crunch. The Proof Of Reserves posted by Kris Marszalek, CEO of Crypto.com quoted Shiba Inu coin – [Memetokens] as the second biggest asset on its Proof of Reserves followed by Bitcoin.

Ethereum and stablecoins reserve on crypto.com:

  • 25-80% of ETH reserves moved four times since Sep 2022.
  • Stablecoins reserve decreased from $2.9B to $292M, -90% over the past 7 months.

This situation has opened increased withdrawal pressure on the CEX. Crypto degenerates are skeptical on how illiquid and volatile those digital assets could be. 

Seems like other market actors would like to see Crypto.com implode. I don’t see it happening. On CNBC, Kris noted he is on a mission to prove ‘Naysayers’ wrong. Meanwhile, some crypto users feel CZ-Binance is trying to eliminate competitors, and owing to the growth on $CRO native token of Crypto.com – which some per-mutate as the ‘stabler’.

Due to the insolvency of FTX and Alameda Research, many Centralized Exchanges, including Binance, have  put forward a Merkle tree proof of funds to help boost transparency and investors confidence in the Crypto Industry. Yes, that also makes it necessary for us to pay attention to our Cryptocurrency Wallet User Manuals, to understand, if necessary, when to do that trigger.

Etherscan on chain Bloockscript reveals transfer of funds within Crypto.com in an attempt to meet up with the rising standard of Showing Proof of Reserves. Apparently, there’s a conflict of interest in play, Crypto.com sent $1B to SBF ex- CEO of FTX they likely fell victim to the incredibly great APR deception an allegation Kris refuted as false but admitted Crypto.com had a $10Million Exposure to FTX.

Users are worried and want an explanation on what this $1Billion transfer is about and it’s relationship with Alameda Research running up to venting. When you answer “this is false, everything is fine ” and don’t explain, you will get the opposite reaction, SBF, Do Kwon and 3AC also said everything was ‘fine’ but tanked in the end.

Mario Nawfal, said the same auditors behind FTX also approved the “proof-of-reserve” snapshots that are coming under scrutiny at Gate and Huobi Exchanges. These snapshots look to have been fluffed up by wash transactions from crypto.com, who claims that this was a mistake, Hard to believe.

Proof of Reserves (PoR) is a point in time, hard to verify when it’s a moving target, PoR does NOT cover liabilities. Who knows where these land, verifying C of the liabilities of a CEX is probably really hard to do. Many existing partners do not understand decentralization and blockchain tech, But with key auditing knowledge they know when something doesn’t smell right.

OXFOOBAR tweeted, if crypto exchanges were car repair shops, you’d come back the next day, ask why your car was replaced with three bikes, and the response would be: “this is false. We have minimal exposure to bike shops and have only used them as a trading venue to hedge customer transportation”.

https://twitter.com/0xfoobar/status/1592370702153560064?s=46&t=VpcHJ4oX-yzDqBhCsLyl_g

If Crypto.com will survive through this storm it will be the most trustable centralized exchange after Binance. To fight the FUD, people need the right answers and proof of what is happening with many internal transactions. Currently, $KCS  and $CRO are breaking to fresh new lows while $FTT gained +23% from its low of $1.2, guess we’ll see if FTX behavior was isolated or something of a trend.

Meanwhile, Changpeng Zhao in a letter to Staff wrote “People now think we are the biggest and will attack us more,” said the Binance CEO. “We are used to being open and leaning into headwinds. In fact, we embrace scrutiny. We must significantly increase our transparency, proof-of-reserves, insurance funds, etc. A lot more to come in this area.” Because of the FTX and Alameda Research crash, some Crypto enterprises will never remain the same.

The Velocity of Kindness

By
Tiamiyu Ismail
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0

The concept, velocity has its origin in physics but has been adopted in other fields such as Economics, Business Studies, Philosophy etc. to explain the general workings of life. In physics, velocity entails speed and its direction; it is the rate of change of position with respect to a frame of reference and time. Therefore, velocity is used to determine the magnitude or speed of an object in a particular direction.

In monetary economics, the term velocity is used to explain the rate at which money exchanges hands in circulation. Since money is a legal tender, it has no real value of its own other than to serve as a medium of exchanging values in the economy. It is based on this that nations create wealth, and it is why nations where rich people hoard their money rather than allow it flow in circulation soon develop economic crisis.

Thus, regarding dealing with money, the rational mind sees himself not as a reservoir but as a river, and not as a holder but a conductor or a conduit of money. This mindset is especially important since the power of money is conceptual and money is measured in terms of the status of the state which is impacted by so many economic variables some of which are unforseen and disruptive.

Velocity can also apply in human social relations. In society, the rate at which people extend moral support and kindness to one another, especially during crisis, contributes to personal and social peace and happiness. I’ve described this as the velocity of kindness or the velocity of goodwill.

Kindness is an act of goodwill that we exhibit towards another without expecting to get anything in return from them, be it material or nonmaterial. Hence, kindness is not a relationship of reciprocity but a voluntary moral investment that has longterm social implications. Kindness is a seed, it requires time to grow and turn in a good harvest. Kindness usually gets its due appreciation long after it is planted.

Thus, when you are kind to people, and they don’t seem to appreciate you duly or immediately, the fault is not in the people — it is simply the nature of kindness to germinate in due course and time. And as for the people, a chain of events and experiences has to play out in their lives for them to be able to reach a true understanding of the meaning and purpose of your kindness in their own evolution.

In the following story of Paderewski and Hoover copied from Historyville’s Linkedln page, we can understand how the velocity of kindness play out in human relations:

An 18 years old student was struggling to pay his fees at Stanford University. He was an orphan, and not knowing where to turn to for money, he came up with a bright idea. A friend and he decided to host a musical concert on campus to raise money for their education. They reached out to the great pianist, Ignacy J Paderewski. His manager demanded a guaranteed fee of $2000 for the musical recital. A deal was struck and the boys began to work to make the concert a success.

The big day arrived. Paderewski performed at Stanford. Unfortunately, they had not managed to sell enough tickets. The total collection was only $1,600. Disappointed, they went to Paderewski and explained their plight. They gave him the entire $1600 plus a cheque for the balance of $400. They promised to honor the cheque at the soonest.

“No” said Paderewski. “This is not acceptable.” He tore up the cheque, returned the $1,600, and told the two boys: “Here is the $1,600. Please deduct whatever expenses you have incurred. Keep the money you need for your fees. And just give me whatever is left”. The boys were surprised and thanked him profusely. It was a small act of kindness. But it clearly marked Paderewski as a great human being.

Several after, Paderewski became prime minister of Poland. He was a great leader, but unfortunately, when the world war began, Poland was ravaged. There were more than 1.5million people starving in his country, and no money to feed them.

Paderewski did not know where to turn for help. He eventually reached out to the US Food and Relief Administration for help. The head of the organization was a man called Herbert Hoover who later went on to become the 31st President of the United States. Hoover agreed to help and quickly shipped tons of food grains to feed the starving Polish people.

A calamity was averted. Paderewski was relieved. He then decided to go across yo Hoover and personally thank him. When Paderewski began to thank Hoover for his noble gesture, Hoover quickly interjected and said:

“You shouldn’t be thanking me Mr Prime minister. You may not remember this, but several years ago you helped two young students go through college in the US. I was one of them” Hoover said.

Google Agrees to $391.5m in Settlement with 40 US States Over Breach of Location Tracking Privacy

By
Samuel Nwite
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0

Web search giant Google has agreed to a whopping $391.5 million settlement with 40 state attorneys general for deceiving users over its location tracking.

Google was found guilty of tracking and collecting location information from users even when they have turned off the location tracking feature. The investigation found that the company deceived users into thinking that the feature is off while it harvests information.

The settlement adds to the many cases of antitrust investigations involving Google and other members of the Big Tech this year. The investigation was co-led by attorneys general of Washington and Oregon.

“For years Google has prioritized profit over their users’ privacy,” said Oregon Attorney General Ellen Rosenblum in a news release. “They have been crafty and deceptive. Consumers thought they had turned off their location tracking features on Google, but the company continued to secretly record their movements and use that information for advertisers.”

The investigation, which marks the largest attorney general-led consumer privacy settlement ever, began after Associated Press reported in 2018 that Google blatantly ignored users’ choice not to track their movement. The investigation found that Google violated state consumer protection laws by misleading consumers about its location tracking practices since at least 2014.

Google said in an email statement sent to TechCrunch that it has already addressed and corrected some of the location tracking practices detailed in the settlement.

“Consistent with improvements we’ve made in recent years, we have settled this investigation which was based on outdated product policies that we changed years ago,” a spokesperson for Google said.

The company has also agreed to make a wide range of changes to its location tracking settings.

As part of the settlement, Google has agreed to improve its location tracking disclosures and user controls starting next year. TechCrunch noted that the settlement requires Google to show additional information to users whenever they turn a location-related account setting on or off. Key information about location tracking must also not be hidden going forward.

In a blog post, Google outlined it will “provide a new control that allows users to easily turn off their Location History and Web & App Activity settings and delete their past data in one simple flow.” The company also plans to add additional disclosures to its Activity controls and Data & Privacy pages.

Alongside these changes, Google is going to create a comprehensive information hub that highlights key location settings. In addition, Google plans to give users who are setting up new accounts a more detailed explanation of what Web & App Activity is and what information it includes. The company said it will continue deleting location history data for users who have not recently contributed new location history data to their account.

“Until we have comprehensive privacy laws, companies will continue to compile large amounts of our personal data for marketing purposes with few controls,” Rosenblum said in the news release.

Google has accumulated antitrust cases that it is trying to settle with different states across the U.S. TechCrunch reported last month that the tech giant agreed to pay the state of Arizona $85 million to settle a separate lawsuit that alleged the search giant deceived users by collecting location data without their consent.

Google is also currently facing a lawsuit from Washington, DC, Texas, Washington state and Indiana over another breach of user privacy involving location data. The lawsuit alleges that Google deceived users by collecting their location data even when they believed that kind of tracking was disabled, per the report.

How Gambling Affects Local Businesses

By
TI Partners
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0

Gambling has always been a controversial topic, and that’s one of the reasons why gambling laws vary from country to country. However, governments across the globe are slowly changing their position on gambling. In the past few years, both online casinos and sports betting have become legal in several countries. Additionally, these businesses quickly gain momentum once they are established. So, there is a high demand for this type of entertainment. Moreover, other local businesses are affected, and additional employment opportunities appear. Here we will talk about the impact of the gambling industry on local economies or other businesses.

Casino Marketing

Traditional marketing can be expensive, so not every brand can afford it. Also, casino and betting commercials are difficult to make and air. This content should not be advertised to children. Therefore, companies need to take a different approach. Gambling businesses mainly rely on digital marketing in order to improve their brand awareness on a local level.

This led to the creation of user forums and third-party review sites. The idea is to tell gamblers which operator has the best offer. Casino enthusiasts use platforms like BetBetter to find PA real money casinos, or they look for operators in another state. This is one of the best ways to find legitimate casino sites where they can win real money. Remember that these businesses are regulated locally. So, it’s always better for the players to find platforms that are registered with the local regulator.

These third-party sites generate revenue through affiliate programs. It’s a perfect example of a middleman culture that is very inviting. Anyone who believes they can do a better job at marketing and evaluating gambling operators is free to try. So, lots of small businesses start with a website and work on quality content that will eventually lead readers to a trusted platform.

Software Developers for Slots

In addition to affiliate marketers, the gambling industry generates a lot of jobs for software developers. There are various game studios that are constantly employing slots developers. Also, this is a good place to start your career in the gaming industry.  Another trend is daily fantasy sports, and that type of content also requires a strong tech team to make sure the engine keeps running.

Live Dealer Games

This is another trend in the gambling industry, and it also creates career opportunities for the young. Of course, a land-based casino is always going to require more staff, but at least dealers who are employed for this game are getting relevant work experience. They can pursue jobs in real casinos, work as croupiers and continue to advance there. Once again, this type of content is outsourced, so it’s really helping the gaming companies expand.

Tax Revenue

One of the main reasons why gambling is becoming legal is tax revenue. Some countries like Norway even hold a monopoly on this type of entertainment to ensure all of the funds are used for the betterment of the local economy. Additionally, even online operators are required to maintain a physical office in the country where their platform is available. This way, even a fully digital business is bolstering the real-estate sector.

The revenue tax for casinos and betting operators ranges between 30% and 50% depending on the geography where their companies are based.  It’s also worth pointing out that, unlike other big businesses, casinos don’t get any tax cuts, in fact, they even pay more taxes.

Sponsorship Deals 

Big brands in the gambling industry have a big and indirect impact on many businesses in specific regions. They mainly sponsor leagues, athletes, and sports teams, but they give them a substantial amount of money. A portion of those funds is used for charity, and also for improving the championship event. This means expanding the stadium, hiring performers, and making the event a bigger spectacle.

This attracts more tourists and helps fuel the economy further. In 2019, there were around 1.5 million tourists in the UK during the Premier league. So this is a massive influx of foreigners, and that’s for the Premier League alone. Also, these are out-of-season visits, so there is no overlapping with summer vacation.

Donations and Hosting

Finally, gambling companies do donate and even organize fundraisers to help those less fortunate or to support different industries. In other words, even non-gaming sectors are getting support from the gambling industry.  Furthermore, big casinos often offer to host events and sports tournaments. Basically, people use them to organize reunions, celebrate birthdays, have a gender reveal party, hold their book club meetings, etc.

As you can see, casinos and sports betting businesses are way more than just gambling joints. Their presence generates employment opportunities, especially for the younger generations that work in the tech industry. Moreover, they help the economy through donations and tax revenue. Also, supporting other industries helps bring in more tourists, which again has a positive impact on other local businesses.

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