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NEM Foundation, on Brink of Bankruptcy, Plans Layoffs and Pivot

The NEM Foundation, a community-funded nonprofit established to promote the NEM blockchain, is planning layoffs across its entire 150-person staff in the wake of severe budget cuts and ahead of an imminent restructuring, CoinDesk has learned.

The newly elected president of the NEM Foundation, Alex Tinsman, told CoinDesk Wednesday the Singapore-based NEM Foundation now intends to submit a funding request to the NEM community fund for 160 million tokens (worth roughly $7.5 million), money that would be used to rescue the organization.

NEM tokens are listed under the XEM ticker with a circulating supply of 9 billion, according to CoinMarketCap. At press time, XEM is the world’s 18th largest cryptocurrency by market capitalization.

“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council,” Tinsman, who took over the non-profit in January, said in an interview.

As a result, the foundation’s 202 members – people who undergo identity checks and pay an annual $50 membership fee – will be asked to vote on the funding request in February after it’s published on Thursday. The number of layoffs will be determined by how much funding the community approves, Tinsman said.

NEM’s XEM token launched in 2015 under the guidance of former foundation president Lon Wong. The cryptocurrency is primarily used for transaction and service fees on the NEM blockchain. The full launch of the platform’s native engine software, called Catapult, is scheduled for later this year. In the meantime, NEM pilot projects have often focused on use cases such as voting.

Indeed, Tinsman herself was elected in a process that used NEM’s platform.

Tinsman said the foundation spent roughly 80 million XEM between December 2017 and January 2019, primarily on marketing. (Wong did not respond to requests for comment about the foundation’s spending.)

“We’ve reduced marketing activities because...

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