Consensys, the developer behind the MetaMask crypto wallet, has announced a significant reduction in its workforce, cutting over 160 employees across all divisions.
This decision, revealed by founder and CEO Joe Lubin in a recent blog post, is attributed to ongoing macroeconomic challenges and escalating legal costs associated with the company’s prolonged battles with regulatory bodies.
Lubin Warns Of Financial Losses For Crypto Firms
In his statement, Lubin emphasized that “multiple cases with the SEC, including ours, represent meaningful jobs and productive investment lost due to the SEC’s abuse of power and Congress’s inability to rectify the problem.”
The CEO of Consensys, also a co-founder of Ethereum, warned that such actions by the US government could result in significant financial losses for many companies in the industry.
Lubin’s remarks reflect a broader sentiment within the cryptocurrency sector, where many believe the US Securities and Exchange Commission (SEC) has acted in bad faith regarding establishing a clear regulatory framework for digital asset companies.
This has led to increased scrutiny of key players and companies in the digital asset industry, including lawsuits against Binance, Coinbase and the recent Wells Notices issued to Uniswap Labs, Robinhood NFT marketplace OpenSea and Crypto.com.
However, SEC Chair Gary Gensler contends that existing laws are straightforward and has initiated lawsuits against several leading firms in the crypto space, including Consensys, for alleged violations of securities laws.
Consensys Announces 162 Job Cuts
Founded in Brooklyn in 2014, Consensys began as an incubator for projects leveraging the emerging Ethereum blockchain, which has since evolved into the second-largest blockchain and a cornerstone of the crypto ecosystem.
MetaMask, its flagship product, is a decentralized wallet for holding Ethereum tokens and accessing related services.
The company has since relocated its headquarters to Texas, where it has focused on developing infrastructure tools to support Ethereum. However, ongoing regulatory uncertainty has hindered its efforts.
In the wake of these regulatory challenges, Lubin initiated legal action against the SEC in April, seeking to clarify that Ethereum should not be classified as a security—a stance supported by many legal experts in the crypto field.
While a federal court dismissed the pre-emptive lawsuit this summer, a related case brought by the SEC is still pending. The SEC also approved the new spot Ethereum ETF market for investors in the US in July, which clarifies ETH’s regulatory status as a commodity.
Despite these hurdles, Consensys has reportedly achieved a legal victory, compelling the SEC to halt its investigation into various firms and developers that depend on Ethereum for their operations.
Lubin described the layoffs as a “tough but prudent decision to streamline our operations,” affecting approximately 162 out of the company’s 828 employees.
The layoffs are expected to impact all units, including business development and product teams. Consensys has pledged severance packages to support those affected, including career assistance and extended healthcare benefits.
Looking ahead, Lubin stated that Consensys aims to accelerate its transformation from a traditional corporate structure into a decentralized “network state,” aligning with the foundational principles of blockchain technology.
At the time of writing, ETH was trading at $2,670, up almost 7% in the last 24 hours.
Featured image from DALL-E, chart from TradingView.com
