Ethereum Software Company ConsenSys Cut Workforce by 20% Amid Regulatory Hurdles

Blockchain development firm ConsenSys, known for creating the Ethereum wallet MetaMask, has cut its workforce by over 20% as it navigates regulatory hurdles.

According to Fortune, Consensys CEO and Ethereum co-founder Joe Lubin confirmed that the redundancy affected 162 of the company’s 828 employees as it aims to streamline its operations and enhance the decentralization of key business functions.

Lubin attributed the layoffs to “headwinds from the macroeconomy as well as legal expenditures from the company’s protracted battles with regulators.”

Consensys will offer comprehensive severance packages, assistance in job placement, extended healthcare benefits, and an extension of the stock option exercise window from 12 to 36 months to support employees impacted by the changes.

Consensys’ Regulatory Woes 

Consensys has been involved in an ongoing legal dispute with the United States Securities and Exchange Commission (SEC), as the agency intensifies its focus on various companies and initiatives within the Ethereum ecosystem. 

In June, Consensys noted that the SEC had ceased its campaign to investigate Ethereum developers. The shift aligns with the view that ether (ETH) is a commodity, not a security, placing it beyond the SEC’s jurisdiction.

However, CEO Joe Lubin expressed that the ongoing regulatory challenges could still have significant consequences. He pointed out that cases like theirs result in job losses and lost investments, which he attributes to SEC overreach and Congressional inaction. Lubin warned that the financial watchdog’s approach could cost the industry millions.

“Such attacks from the US government will end up costing many companies…many millions of dollars,” he said.

Growing Concerns Over SEC Approach

Many in the crypto community are increasingly concerned that the SEC lacks clear guidance for digital asset operators, creating uncertainty in an already volatile market. Lubin’s view underscores this sentiment, highlighting that the SEC’s lack of clarity is a significant issue within the sector.

In response to these concerns, Coinbase’s co-founder and CEO, Brian Armstrong, has called for a change in the SEC’s approach. Armstrong suggested that the next SEC chair “should withdraw all frivolous cases” and apologize to Americans for the regulatory inconsistency in crypto oversight.