NEM Foundation Facing Bankruptcy

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NEM Foundation, the developer behind the XEM token, may soon become another victim of the bear market after posting an update to its members that stated it has only one month of funds left available to it. The update, posted Thursday morning, explains the “very big problem” currently facing it as it fights to survive a bear market that shows no sign of ending soon. The update explains how a new ‘council’ took over reins in January and, upon looking at the books, realized there were several critical issues that need urgent attention if the project is to continue.

Bear Market Blues

The update acknowledges the “catastrophic drops” in the XEM token price in the last year, which has seen it crash from its January high of $1.70 to a current price of $0.04, representing a 97.6% drop, as a result of which the foundation is facing some “challenging budget decisions”. The post also laid out what the new council found when they began looking at the books in early 2019:

We saw a lot of talented people who were working hard, but not aligned with the same goals. We saw efforts being duplicated, and inconsistent metrics of success. We saw very little accountability for funds and questionable ROI, leading to a burn rate of 9 million XEM per month. In terms of running an effective organization, the existing structure failed. Maybe that didn’t seem like a big problem when the XEM price was high, but it’s a very big problem as we seek to sustain a viable organization in the ‘Crypto Winter’.

Turning the Ship Around

NEM outlines how it plans to move forward, which involves, it says, “hitting refresh and starting from scratch”. This includes a complete staff restructuring, increased council oversight in regard to spending, reducing promotional spending, and adding “an aggressive set of goals for tech product features, developer tools, and programmers”. Staff cuts seem inevitable given that, with only a month’s funding left, NEM “won’t be able to support our current headcount, partnerships, and projects.” Despite these setbacks, the post ends with a positive view of what the restructuring should achieve:

We are optimistic about the future of the NEM Foundation under its new council. With a laser-focus on our mission-critical goals, we are positioned to remain an industry leader through this ‘Crypto Winter’.

Having seemingly stopped the rot before it became terminal, NEM have given themselves a fighting chance of coming out of the bear market alive. That being said, the next couple of months will prove vital if they are to have a chance of realizing their new goals and remaining a going concern.