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ConsenSys, the blockchain software firm behind the popular crypto wallet MetaMask, is laying off a significant portion of its workforce, founder and chief executive officer Joseph Lubin announced.
The layoffs will impact about 20% of the company’s staff, Lubin said in an announcement published on Oct. 29. The ConsenSys CEO explained the reasons behind the “tough decision” to let go of 160 employees.
According to Lubin, who is also a co-founder of Ethereum (ETH), the decision to downsize comes amid challenges from a difficult regulatory landscape. ConsenSys is also seeking to streamline operations as it navigates macroeconomic pressures.
“Today, we are making the tough but prudent decision to streamline our operations to position Consensys for ongoing rapid innovation, long-term sustainability under possibly volatile scenarios, and continued leadership in the web3 space,”
The move, he added, will help the company stay competitive.
In terms of the macroeconomic landscape, Lubin pointed to the impact of rising interest rates and inflationary pressures, as well as tightening liquidity, factors that have affected many companies in the crypto industry.
There’s also the issue of regulatory uncertainty, with ConsenSys incurring legal expenses in its ongoing battle with the U.S. Securities and Exchange Commission.
“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,” he noted.
The various enforcement actions by the SEC, including lawsuits, investigations, and Wells Notices, are costing impacted companies millions of dollars.
The ConsenSys CEO’s remarks reflect a broader sentiment across the crypto space, with many accusing the SEC and its Chair Gary Gensler of an anti-crypto stance that is hurting the industry in the U.S.
This situation has led some companies to sue the regulator over alleged overreach.
In April this year, Consensys sued the SEC over the regulator’s stance on Ethereum and in October, penned an open letter to the future U.S. president about crypto regulation.
As Consensys looks to lay off staff, some crypto companies impacted by the macroeconomic environment have sought different options. Strategic options include merger and acquisitions and initial public offering.