SEC’s Aggressive Stance Blamed for Consensys Layoffs
Joseph Lubin, CEO of Consensys, expressed his frustration with the SEC’s harsh approach towards the cryptocurrency industry in a blog post on October 29. Lubin argued that the agency’s actions have hindered innovation and suppressed growth.
Lubin stated, “The SEC’s abuse of power and Congress’s inability to address the issue have resulted in the loss of significant jobs and productive investments, including our own.”
While layoffs have become commonplace due to high interest rates affecting many companies’ balance sheets, crypto-native firms like Consensys have been hit particularly hard when faced with SEC regulatory actions, burdened by legal fees.
In an effort to fight back against the regulator, Consensys filed a lawsuit earlier this year, accusing the SEC of overreach and attempting to gain control over Ethereum. This move reflects a larger trend in the crypto space of major companies challenging the status quo.
Consensys Calls for Clear Crypto Regulations
The recent layoffs at Consensys came just a week after the company published an open letter to the next U.S. president, pleading for clear regulations in the crypto industry.
Consensys expressed concerns about the fragmented nature of U.S. crypto regulations, which it believes create an environment susceptible to fraudulent activities. The company also highlighted how inconsistent rules have resulted in enforcement actions that disrupt legitimate businesses.
The letter emphasized the need for collaboration between Congress and regulatory bodies to prevent what it described as “disingenuous enforcement actions.”
Consensys urged the next administration to prioritize progress, accountability, and equal access for all participants in the Web3 space. The company emphasized that blockchain and cryptocurrency technologies are gaining widespread adoption in regions like Europe and Asia, making regulatory clarity crucial for the U.S. to remain competitive.
Anticipated Regulatory Shift with U.S. Election
The upcoming presidential election on November 5 is expected to bring about 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 election. If re-elected, former President Donald Trump has vowed to dismiss Gary Gensler on his first day, and other Republican leaders have also called for new leadership at the agency.
Meanwhile, industry advocates have called for a chairperson with a more forward-looking stance, and Rep. French Hill recently called for a change in SEC leadership in 2025.
Although crypto hasn’t been a central focus of Kamala Harris’s campaign, proponents of the industry remain hopeful that she will bring about positive changes. Ripple co-founder Chris Larsen believes Harris is “pro-innovation” and cites her economic stance as an assurance that American companies can excel globally.
Larsen’s significant $10 million contribution in XRP to support Harris’s campaign reflects his confidence in her ability to create a more favorable regulatory environment, especially considering the impact of the SEC’s actions on Ripple’s XRP.