Quick take:
- Consensys pointed out the broader macroeconomic conditions and ongoing regulatory uncertainty as a reason for the layoffs.
- The company also blames the U.S. Congress for failing to rectify the problems created by the SEC’s “abuse of power”.
- The U.S. regulator accused the crypto company of engaging in “the offer and sale of [unregistered] securities” through the MetaMask wallet.
Consensys is laying off 20% of its staff amid its ongoing battle with the U.S. Securities and Exchange Commission (SEC). The blockchain software developer has accused the U.S. securities regulator of ‘abusing its power’ amid its ongoing lawsuits against multiple crypto companies.
In June, the SEC sued Consensys alleging that the company operated as an unregistered securities broker through MetaMask’s crypto-staking service on Ethereum.
The SEC has issued several crypto companies with Wells Notices, some of which agreed to settle with the regulator and pay the relevant fines.
In September, Mango DAO and Blockworks Foundation accepted a $700k settlement with the SEC. In May, the securities regulator recommended an enforcement action against Robinhood Crypto, with the filing stating Robinhood’s crypto business unit has been cooperating with investigations.
On the other hand, earlier in October, Crypto.com sued the SEC after receiving a Wells Notice, with the crypto exchange company stating its lawsuit sought to “protect the future of the cryptocurrency industry in the U.S.”
In a blog that Consensys founder and CEO Joe titled “Consensys’ path to long-term sustainability and decentralisation,” he argued that “the lack of clear regulatory frameworks in some markets has made navigating [the evolving crypto] space unnecessarily complex for innovators, builders, investors, and businesses.”
This is a contributing factor to the company’s decision to cut jobs, with Lubin adding that “Multiple cases with the SEC, including [Consensys], represent meaningful jobs and productive investment lost due to the SEC’s abuse of power and Congress’s inability to rectify the problem.”
“Such attacks from the US government will end up costing many companies…many millions of dollars,” he said.
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