Consensys Lays Off 20% of Workforce, Joe Lubin Blames SEC

Consensys, the blockchain development company known for its MetaMask wallet, has announced the layoff of over 160 employees, representing 20% of its workforce. This decision comes as a response to ongoing macroeconomic challenges and significant legal expenses from regulatory disputes.

Criticism of Regulatory Actions

In a recent blog post, Consensys CEO Joe Lubin expressed concerns over the US Securities and Exchange Commission (SEC), accusing it of an "abuse of power." He emphasized that the SEC's aggressive regulatory actions have led to considerable job losses and stifled investment in the blockchain industry.

Lubin pointed out that the lack of legislative clarity and the SEC's enforcement strategies have forced companies into expensive legal battles, adversely affecting their operations and innovation potential.

Support for Affected Employees

To assist those impacted by the layoffs, Consensys has pledged to provide support, including severance packages, extended stock option exercise periods, outplacement services, and continued healthcare benefits. Lubin stated that this difficult decision aims to streamline operations and ensure the company's long-term sustainability.

Ongoing Legal Disputes

Consensys is currently embroiled in a regulatory dispute with the SEC, which issued a Wells notice in April regarding potential enforcement actions related to its MetaMask offerings. The company has responded by filing a lawsuit against the SEC, alleging that the agency is attempting to exert control over the cryptocurrency sector.

Despite these efforts, a Texas federal judge dismissed the lawsuit on procedural grounds in September, leaving Consensys to navigate its regulatory challenges.

Future Direction

In light of the restructuring, Consensys plans to shift towards decentralization, aiming to transform its infrastructure products into protocols and develop a "Network State" over time. This strategic pivot reflects the company's commitment to adapting to a rapidly changing industry landscape.