SEC ‘Abuse of Power’ Blamed for 20% Layoff by Consensys CEO
Joseph Lubin, the CEO of Consensys, has expressed frustration with the aggressive stance taken by the SEC towards the crypto industry. In a blog post on October 29, Lubin argued that the actions of the agency have hindered innovation and stifled growth.
Lubin 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 in recent years due to high interest rates affecting balance sheets, crypto-native firms like Consensys have been hit particularly hard when caught up in SEC regulatory actions, facing the burden of legal fees.
In an effort to fight back against the regulator, Consensys filed a lawsuit against the SEC earlier this year, claiming that it was engaging in regulatory overreach and attempting to gain control over Ethereum. This move reflects a larger trend in the crypto space, with major companies willing to push back against regulatory authorities.
Consensys Calls on Next U.S. President for Help
The layoffs at Consensys come less than a week after the company penned an open letter to the next U.S. president, pleading for clear crypto regulations. The blockchain developer expressed concerns about the fragmented nature of U.S. crypto regulations, arguing that they create an environment conducive to fraudulent activities.
The company also highlighted the disruptive nature of inconsistent rules and enforcement actions on legitimate businesses. Consensys emphasized the need for collaboration between Congress and regulatory bodies to prevent what it described as “disingenuous enforcement actions.”
The letter urged the next administration to prioritize “advancing progress, accountability, and equitable access” for all participants in the Web3 space. Consensys pointed out that blockchain and cryptocurrency technologies are gaining widespread adoption in regions like Europe and Asia, making regulatory clarity even more crucial for the U.S. to maintain its competitiveness.
Regulatory Shift Expected with U.S. Election
The upcoming presidential election on November 5 is expected to bring about a shift in the U.S. crypto regulatory framework, with bipartisan support from leading candidates Donald Trump and Kamala Harris.
There is a possibility of a leadership change at the SEC following the election. Former President Donald Trump has pledged to dismiss Gary Gensler on his first day if re-elected, and other Republican leaders have also called for new leadership at the agency.
In the industry, there is a call for the appointment of a chair with a more forward-looking stance towards crypto. Additionally, Representative French Hill recently called for a change in SEC leadership by 2025.
While crypto has not been a central focus of Kamala Harris’s campaign, advocates in the industry remain hopeful that she will bring about a positive shift. Ripple co-founder Chris Larsen has claimed that Harris is “pro-innovation” and believes that her economic stance will ensure that American champions dominate their industries globally.
Larsen’s significant $10 million XRP contribution to support Harris’s campaign reflects his confidence in her ability to cultivate a more favorable regulatory environment, especially considering the impact of the SEC’s actions on Ripple’s XRP.
