protos.com
Pro-Ethereum conglomerate Consensys has announced a mass round of layoffs that its founder and CEO Joe Lubin has primarily blamed on the Securities and Exchange Commission’s (SEC) “abuse of power” and “attacks.”
In a blog post announcing the 162 “right-size” job cuts — 19.5% of its 828 employees — Lubin also called out Congress for its “inability to rectify” Consensys’ legal woes.
The SEC is suing Consensys for several profitable business units that allegedly violate US law. In its June 28 suit, commissioners explained that Consensys’ Swaps feature of its MetaMask software acts as an unregistered broker that effects securities transactions on behalf of investors. Moreover, they say Consensys also sold unregistered securities through its MetaMask Staking.
Read more: SEC tries to expand crypto jurisdiction with Consensys lawsuit
For its part, the firm primarily argues that users control MetaMask software and do not rely on Consensys for these transactions. The SEC has counterargued in detailed court filings that the conglomerate’s suite of code, hosted services, nodes, relayers, and human-directed choices not only make MetaMask indispensable for many users but also demonstrate the company’s willful and profitable violations of law.
The main lawsuit is ongoing in the US District Court for the Eastern District of New York. The next meeting is scheduled for November 20 to set a schedule for evidence discovery.
Consensys has already lost one lawsuit against the SEC
Consensys has failed in many of its attempts to fend off SEC enforcement. Earlier this year, it preemptively sued the SEC after it received a Wells Notice.
On September 19, a federal judge dismissed that attempt. Lubin had asked a Texan court to rule that ETH transactions were somehow not securities transactions because they involved ETH, prohibit the SEC from suing companies for using ETH, and bless its Ethereum-friendly MetaMask wallet. The judge declined all of Lubin’s requests.
Consensys previously laid off 100 of its then-900 workers in January 2023. In 2018, when the company had some 1,200 workers, a layoff affected approximately 600 workers.