Consensys Cuts Workforce by 20%, Joe Lubin Blames SEC’s ‘Abuse of Power’

Consensys, the blockchain development firm behind the popular MetaMask crypto wallet, has decided to lay off over 160 employees. The move impacts 20% of its total workforce.

According to founder and CEO Joe Lubin, this decision was driven by macroeconomic challenges and substantial legal costs incurred during the company’s extended regulatory battles.

Job Cuts at Consensys

In the latest blog post, Lubin criticized the US Securities and Exchange Commission (SEC) for what he termed an “abuse of power. ” He highlighted how multiple regulatory cases, including those involving his company, have resulted in significant job losses and hindered productive investment in the blockchain sector.

The exec argued that the agency’s aggressive enforcement actions and the lack of legislative support from Congress have created an environment of uncertainty, forcing many entities into costly legal battles. He further added that these government actions could ultimately lead to millions of dollars in losses for businesses that have been investigated, sued, or issued Wells Notices, stifling innovation and growth within the industry.

In response to these challenges, Consensys announced a workforce reduction affecting 20% of its employees, a decision aimed at streamlining operations and ensuring long-term sustainability. The company, however, assured that it will provide support for affected staff. This includes severance packages, extended stock option exercise windows, outplacement services, and continued healthcare benefits.

“Today, we are making the tough but prudent decision to streamline our operations to position Consensys for ongoing rapid innovation, long-term sustainability under possibly volatile scenarios, and continued leadership in the web3 space.”

Consensys vs. SEC

Consensys and the SEC have been embroiled in a regulatory dispute this year. The company received a Wells notice from the agency in April which indicated that the latter might pursue enforcement actions related to Consensys’ MetaMask Swaps and MetaMask Staking offerings.

The software development company hit back with a lawsuit against the securities regulator and its five commissioners.

In its filing, Consensys alleged that the SEC is executing a campaign to control the cryptocurrency industry through enforcement actions targeting Ether. It referred to past agency statements, including those from Chair Gary Gensler, affirming that ETH was not a security and warned that a change in this stance could jeopardize companies that have relied on established regulatory frameworks.

However, in September, a Texas federal judge dismissed the lawsuit on “procedural grounds.”

With the latest restructuring, Consensys also revealed plans to pivot towards decentralization, transforming its infrastructure products like MetaMask into protocols while fostering a “Network State” over time.