Consensys, the blockchain developer behind the popular MetaMask wallet, has announced a 20% workforce reduction.
Founder and CEO Joseph Lubin cited difficult macroeconomic conditions and regulatory uncertainties in his decision, shared in a blog post on Tuesday. Lubin stated that the layoffs are part of an effort to make Consensys more “agile, effective, and higher-performing” to ensure the company’s long-term sustainability in the rapidly evolving web3 space.
MetaMask, a well-known tool for crypto transactions, has kept Consensys at the forefront of the decentralized finance movement. Yet, the company has faced legal challenges from the U.S. SEC, which questioned MetaMask’s regulatory standing, specifically in regard to Consensys’ MetaMask swaps feature.
Earlier this year, a U.S. judge dismissed Consensys’ lawsuit against the SEC over Ether’s security classification, but the SEC still has open claims regarding the company’s broker status.
The lawsuit was filed by MetaMask wallet developer in April and alleges that the SEC has been attempting to exert control over the future of cryptocurrency through enforcement actions aimed at regulating Ether as a security. It sought a legal declaration that Consensys’s sales of ETH do not constitute securities transactions.
Consensys claimed that the SEC opened an investigation into Ethereum and was considering regulating it as a security, also issuing the company a Wells notice concerning its MetaMask wallet software.
In light of these layoffs, Consensys assured that affected employees would receive “generous severance packages” and an extended stock options period to soften the impact of this transition.
This restructuring news also comes as Consensys faces an ongoing lawsuit from former employees who allege that Lubin didn’t honor early equity promises made when the company was founded in 2014. Consensys has strongly denied these claims, calling the lawsuit “frivolous” and asserting that the plaintiffs, who were associated with Consensys Mesh, are not directly related to Consensys Software.
As Consensys works through these challenges, it’s worth noting that the company, which was valued at $7 billion last year, raised over $700 million in funding amid significant growth in the crypto sector.
