- Consensys cut 20% of its workforce due to economic and regulatory challenges.
- CEO Joe Rubin criticized the SEC’s actions as a harmful “abuse of power.”
- The company aims to strengthen decentralization and evolve into a “network state”.
Consensys, a pioneer in blockchain technology and a major proponent of the Ethereum network, recently announced a 20% workforce reduction.
Affected employees will receive a severance package, expanded health benefits and outplacement services to assist with the transition.
The decision stems from a combination of challenging macroeconomic conditions and increasing regulatory pressure in the cryptocurrency sector, with Consensys’ leadership citing “abuse of power” by the U.S. Securities and Exchange Commission (SEC) as a significant factor.
In a recent blog post, founder and CEO Joe Lubin expressed frustration with the financial and operational burdens resulting from ongoing regulatory actions.
“Several cases involving the SEC, including ours, indicate that meaningful jobs and productive investments have been lost due to the SEC’s abuse of power and Congress’s inability to address the issues,” Lubin said. He added that these actions by the government will cost cryptocurrency companies millions of dollars in legal costs, lost business opportunities, and hinder innovation in a sector that is at the stage of mainstream adoption.
The legal battle between Consensys and the SEC primarily centers on the regulator’s claims that Consensys has been operating as an unregistered broker, particularly through its MetaMask service.
According to the SEC, a company’s operations may include the offering and sale of securities, which requires formal registration.
The dispute escalated when Consensys filed a countersuit against the SEC alleging regulatory overreach. The company argues that the SEC’s aggressive stance is a “power grab” over Ethereum designed to exert more control over the decentralized financial product.
This stance aligns Consensys with several other crypto companies, including Coinbase and Grayscale, that have resisted SEC enforcement and represents a larger industry backlash against unclear regulation.
Despite these challenges, Consensys maintains a strong market position as it continues to focus on Ethereum-based products such as MetaMask and Infura, which have become essential tools within the blockchain ecosystem.
To navigate this uncertain environment, companies are taking steps to streamline and evolve their operations and ensure agility and long-term sustainability in an often volatile industry.
Going forward, Consensys aims to strengthen decentralization within its structure. By gradually transitioning its products to protocols, Consensys plans to evolve from a centralized company to a “network state” that will use tools like MetaMask to chart this new direction. These changes could enable a more distributed, web3-based future where small, nimble companies drive the economy and foster innovation.
Through these structural changes, Consensys seeks to maintain its commitment to Ethereum’s mission while adapting to an ever-changing regulatory and economic environment.