NEM Foundation Close to Bankruptcy, Might Start Layoffs Next Month

NEM Foundation Close to Bankruptcy, Might Start Layoffs Next Month

               

The NEM foundation, a non-profit organization established to support

the ongoing development of the NEM (XEM) blockchain platform, is reportedly planning to layoff many of its staff members. Due to the prolonged crypto bear market, the NEM foundation has been forced to reduce its operational costs and also begin restructuring its organization. Alex Tinsman, the newly appointed president of the NEM foundation, told Coindesk (on January 30th) that the Singapore-based organization will be submitting a funding request to the NEM community fund. The NEM foundation is seeking 160 million XEM tokens (to help it cover operational costs), an amount currently valued at about $6.85 million according to CryptoCompare data. These funds are urgently required as the NEM foundation is reportedly close to filing for bankruptcy.

In an interview this month, Tinsman revealed: 

Basically we realized we had a month to operate, due to the is management of the previous governance council.

Layoffs Could Begin Next Month

NEM foundation’s 202 supporting members, who are required to comply with know-your-customer (KYC) requirements and also pay a yearly $50 membership fee, will be voting on whether to approve the funding request in February. Based on the amount of funding the NEM foundation receives, the organization will announce the number of employees it will be laying off, Tinsman stated. Launched in March 2015, the NEM cryptocurrency network is based on a centralized blockchain model and it’s governance, or platform management, is often compared to Dash (DASH). Notably, XEM tokens were initially distributed to a group of individuals who helped develop the NEM platform.

NEM To Launch "Full-Featured" Blockchain Engine 

According to NEM’s founders, the few people that held XEM started distributing the tokens to NEM’s growing community. Former NEM foundation president, Lon Wong had expressed confidence about NEM’s potential in an interview in February 2018 – when the market capitalization of XEM tokens and other cryptoassets were considerably higher.

At that time, Won had explained that the NEM platform and its native cryptocurrency was primarily developed to facilitate cheap transactions and help businesses conveniently pay routine services fees. NEM’s development team is planning to launch Catapult, the platform’s “full-featured” blockchain engine. The updated version of NEM’s protocol is being developed specifically for enterprise-level use in public and private networks.

Reducing Marketing Activities

Some of the use cases for NEM that are currently being explored are blockchain-based voting. According to Tinsman, the NEM foundation spent approximately 80 million XEM (appr. $34 million at current rates) between December 2017 and January 2019 on marketing services. However, Tinsman said that the foundation has “reduced [its] marketing activities” as “it doesn’t make sense to market a product [Catapult]” that has not yet been introduced.

Notably, a blockchain developer who had been working under NEM’s previous management team, revealed that the foundation’s former president, Wong, had been promoting what the developer thinks are questionable ICO projects, including Ecobit and ProximaX. The developer, who chose to remain anonymous, said: “the community felt this was a breach of faith” (on Wong’s part).

Need For Better Budget Management

He added:

There’s not a whole lot of people working on this platform. Even though it’s easy, the community isn’t really there unless you go to Japan. We need more developer traction on this platform.

In order to better manage NEM’s operations, Tinsman, a former communications executive at the foundation, is planning to cut costs and will be closely supervising the development budget.

She explained:

The community will also be voting on these [funding requests] and which ones we should be moving forward with.

Article Produced By
Omar Faridi

I enjoy writing about all topics related to Bitcoin, Blockchain, and other cryptocurrencies. The topics that interest me most are crypto regulations, quantum resistant blockchains, Ethereum and Bitcoin Core development, and scams orchestrated under the guise of ICOs. My academic background includes an undergraduate degree in Computer Science, with a minor in Mathematics from the University of Nevada, Las Vegas. I also possess a Master of Science degree in Psychology from the University of Phoenix.

While completing my coursework, I engaged in independent study programs focused on public-key cryptography and quantum computing. My professional work experience includes working as an application developer for the University of Houston, data storage specialist at Dell EMC, and as Teacher of Mathematics in the United States, China, Kuwait, and Pakistan.

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