SEC’s ‘Abuse of Power’ Blamed for 20% Consensys Layoff
Joseph Lubin, CEO of Consensys, expressed frustration with the SEC’s aggressive approach to the crypto industry in a blog post on October 29. He argued that the agency’s actions have hindered innovation and stifled growth, leading to a loss of jobs and investment.
Lubin’s post stated, “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.”
While layoffs have become common due to high interest rates, crypto-native firms like Consensys have been hit particularly hard when involved in SEC regulatory actions, facing the burden of legal fees.
In an attempt to challenge the regulator, Consensys sued the SEC earlier this year for regulatory overreach, claiming that it is attempting to exert control over Ethereum. This move is part of a broader trend in the crypto space of large companies fighting back.
Consensys Appeals to the Next U.S. President
Consensys layoffs come nearly one week after the company urged for clear crypto regulations in an open letter addressed to the next U.S. president. The blockchain developer expressed concerns over the fragmented nature of U.S. crypto regulations, which it argues create an environment conducive to fraudulent activities. The company also highlighted how inconsistent rules have led to enforcement actions that disrupt legitimate businesses.
Consensys emphasized the need for collaboration between Congress and regulatory bodies to prevent “disingenuous enforcement actions.” The company’s letter urged the next administration to focus on “advancing progress, accountability, and equitable access” for everyone involved in the Web3 space.
Consensys noted that blockchain and cryptocurrency technologies are seeing widespread adoption in regions like Europe and Asia, making regulatory clarity even more critical for the U.S. to remain competitive.
U.S. Election to Bring Regulatory Shift
The November 5 presidential election is expected to bring a change in the U.S. crypto regulatory framework, with support from leading candidates Donald Trump and Kamala Harris.
The possibility of a leadership change at the SEC looms large in the upcoming presidential election. Former President Donald Trump has vowed to dismiss Gensler on his first day if re-elected, with other Republican leaders also advocating for new leadership at the agency. Meanwhile, pro-crypto voices in the industry have called for the appointment of a chair with a more forward-looking stance, and people like Rep. French Hill also recently called for SEC leadership change in 2025.
While crypto hasn’t been a focal point of Kamala Harris’s campaign, industry advocates continue to hope that she will bring about a positive shift. Ripple co-founder Chris Larsen claims Harris is “pro-innovation,” citing her economic stance as an assurance that “our American champions dominate their industries around the world.” Larsen’s substantial $10 million XRP contribution to support Harris’ campaign reflects confidence in her potential to cultivate a more favorable regulatory environment, especially since the SEC’s regulatory actions have greatly impacted Ripple’s XRP.
