Consensys cuts workforce by 20%, Joe Lubin blames SEC ‘abuse of power’

Consensys, the blockchain development company behind the popular MetaMask crypto wallet, has decided to lay off more than 160 employees. The move affects 20% of its total workforce.

According to founder and CEO Joe Lubin, this decision was motivated by macroeconomic challenges and substantial legal costs incurred during the company’s protracted regulatory battles.

Reduction of jobs at Consensys

In the latest blog post, Lubin criticized the US Securities and Exchange Commission (SEC) for what he called an “abuse of power.” “He highlighted how multiple regulatory cases, including those involving his company, have resulted in significant job losses and hindered productive investment in the blockchain sector.

The executive argued that the agency’s aggressive enforcement actions and lack of legislative support from Congress have created an environment of uncertainty, forcing many entities into costly legal battles. He further added that such government actions could ultimately result in millions of dollars in losses for companies that have been investigated, sued or issued Wells notices, stifling innovation and growth within the industry.

In response to these challenges, Consensys announced a workforce reduction that will affect 20% of its employees, a decision aimed at streamlining operations and ensuring long-term sustainability. The company, however, assured that it will support the affected staff. This includes severance packages, extended stock option exercise periods, outplacement services and continued healthcare benefits.

“Today, we are making the tough but prudent decision to streamline our operations to position Consensys for continued rapid innovation, long-term sustainability under potentially volatile scenarios, and continued leadership in the web3 space.”

Consensys v. SEC

Consensys and the SEC have been embroiled in a regulatory dispute this year. The company received a Wells notice from the agency in April that the agency could take enforcement actions related to Consensys’ MetaMask Swaps and MetaMask Staking offerings.

The software development company responded with a lawsuit against the securities regulator and its five commissioners.

In its filing, Consensys alleged that the SEC is running a campaign to police the cryptocurrency industry through enforcement actions targeting Ether. He referred to previous statements by the agency, including those by chairman Gary Gensler, that stated that ETH was not a security and warned that a change in that position could endanger companies that have relied on regulatory frameworks established

However, in September, a federal judge in Texas dismissed the lawsuit on “procedural grounds.”

With the latest restructuring, Consensys also revealed plans to pivot toward decentralization, transforming its infrastructure products like MetaMask into protocols while fostering a “network state” over time.

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