The foundation attached to NEM (XEM), a cryptocurrency project building a network designed for better-performing smart assets, is reportedly on the verge of bankruptcy after a year of questionable marketing efforts.
Dear #NEM Community,
It’s been about one month since the new council started, and a lot has happened. We are committed to transparency, so we are pulling back the curtain with some good news, some difficult news, and some major #announcements👇https://t.co/OZo4fqkwLo pic.twitter.com/LmdkpzBGbu
— NEM (@NEMofficial) January 31, 2019
According to a recent post, NEM’s new governance council discovered significant mismanagement of staff and projects after reviewing the foundation’s books.
“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,” states the NEM Foundation. “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.'”
A majority of the misused funds reportedly went toward marketing, with 80 million XEM spent between December 2017 and January 2019.
According to a report by CoinDesk, the NEM Foundation is planning to submit a funding request to the NEM community fund for 160 million XEM, which roughly equals $7.5 million at the moment. Additionally, the firm is planning layoffs across its entire 150-person staff in order to further consolidate operations.
Alex Tinsman, the NEM Foundation’s newly elected president, told CoinDesk that NEM plans to involve the community in the process of determining how funds are spent going forward, as well as monitoring how these funds are actually used. Tinsman was elected earlier in January by 148 of the foundation’s 202 members, a group of people that pay $50 annually.
“Basically we realized we had a month to operate, due to the mismanagement of the previous governance council,” Tinsman explained in the interview.
XEM is currently down around 37% since the start of the year and 11% over the last 24 hours, bringing the price to $0.041553 with a $374.1 million market cap.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.