“The NEM Foundation You Knew Before Is Gone,” What Is Next
(Source: cointelegraph.com)

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(Original link: cointelegraph.com)

“The NEM Foundation You Knew Before Is Gone,” What Is Next A recap of NEM Foundation’s financial problems and why a complete organizational overhaul was necessary. The NEM Foundation was forced to make an emergency announcement on their current financial situation and considers asking the NEM community for additional funding 792 Total views 122 Total shares Follow up As part of the closing statements in an open announcement to the NEM community, the NEM Secretarial Office, which represents the voice of the NEM Foundation’s executive committee and council, said in “one final message for all” that the NEM Foundation community members knew before “is gone.” The announcement was made in an effort to stay true to their commitment of transparency and pulled back the curtain on a number of sensitive issues, including an acknowledgement that the foundation is facing severe financial difficulties and a realization that the previous organizational structure failed. A financial audit was reportedly done after the current NEM Foundation leadership team took office on Jan. 1, 2019, which revealed that they are running low on XEM (the native currency of the NEM blockchain platform) and fiat funds. NEM Foundation’s financial situation has deteriorated to the point where they only have one month’s operational funding left in reserves, as of Jan. 1, 2019. Since the announcement was made, concerned community members and investors posted questions to the executive committee to try to get to the bottom of what happened. With information coming through sporadically, current NEM Foundation President Alexandra Tinsman confirmed to one particularly vocal community member, Jelin1984, that they have to cover all their bases legally before releasing additional information. “Please know I understand how confusing things look and we are working to communicate all information to you and the community in a timely manner. Part of this means we have to take extra steps to ensure we are legally and correctly sharing information — this takes time to do.” NEM Foundation background The NEM foundation was started in 2017, two years after the launch of NEM (XEM), an out-of-the-box, enterprise-grade blockchain platform. It is based in Singapore and in charge of developing and promoting NEM. According to its website , the sole purpose of the foundation is to introduce, educate and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions. NEM co-founder Lon Wong was the founding president of the NEM Foundation until his resignation in early April 2018. Since April 2018, Kristof Van de Reck served as the interim president of the NEM Foundation until Alexandra Tinsman was voted in as president on Dec. 14, along with newly elected members of the executive committee and council. Only eligible NEM members can vote in NEM council elections. To become eligible, individuals need to be a minimum of 21 years old, pay the annual membership fee ($50 for individuals/$500 for corporations with fewer than 25 employees/$1,000 for corporations with 25 or more employees) and comply with certain Know Your Customer ( KYC ) requirements. The 2018 NEM Foundation election process didn’t go smoothly either, as confirmed in a post-election message from then-Interim President Kristof Van de Reck. Only 202 membership accounts were white-listed to vote , the most common reason for membership applications failing being KYC issues and tainted memberships. Some membership applications were refused to due to human error, there were issues with the registration site not being able to accept new membership application sign-ups, the NEM Medium account (where most of the election guides were housed) was suspended midway through the voting process, and there were issues with the Ledger Nano wallet that forced some members to vote manually. Of the 202 eligible voters, only 148 voted, due in part to the issues mentioned above. Although Tinsman repeatedly stated that the NEM Foundation operates as a separate entity to the NEM blockchain platform, the actions of the NEM Foundation have an undeniable impact on the price of XEM, as pointed out by community member Dan_V. “I understand that the Foundation is not NEM, however it seems to have an uncanny ability to cripple most parts of it – whether that is through infighting, unprofessional behaviour by representatives of the council or just lack of direction for NEM as a whole.” The announcement on Jan. 31, 2019 wiped more than $65 million from the XEM market cap in one day. How did the NEM Foundation get into such deep financial difficulty? The announcement touched upon some surface level reasons that led to the foundation’s current financial problems, including misaligned goals from key staff members, efforts being duplicated, inconsistent success metrics, little accountability for funds and a questionable return on investments (ROI). As a result, the foundation burned through 9 ...