Chia Network has undertaken significant staff reductions, letting go of over a third of its workforce today, as the blockchain platform grapples with the restoration of a crucial banking relationship.
This move has further complicated Chia’s quest for a swift initial public offering (IPO).
The open-source software firm, recognised for its commitment to a United States (US)-compliant approach for listing on a US exchange, communicated the termination of positions to 26 out of its 70 employees.
This decision comes in the wake of Chia’s filing with the Securities and Exchange Commission (SEC) to initiate its public offering process, an endeavour disrupted by the collapse of its banking partner, Credit Suisse.
Chia CEO Gene Hoffman expressed the regrettable necessity of these layoffs, which predominantly impact “ecosystem support” rather than sales and marketing.
To ensure the company’s financial stability during the runway to its IPO, Chia is also considering selling a portion of its own token, XCH, although the volume will be limited.
This move follows Chia’s recent recognition of the feasibility of carefully decentralised tokens satisfying current digital commodity standards, as seen in legal cases involving Ripple and Terraform Labs.
Regarding its IPO, Chia secured a new banking relationship with a US institution at the end of the previous week, marking a critical milestone.
However, the specifics of this partnership remain undisclosed due to ongoing preliminary SEC negotiations.
Despite these developments, Chia remains in an uncertain regulatory landscape, attempting to meet US regulators’ expectations without embroiling itself in open legal battles.
CEO Gene stated that:
“Our interaction with the SEC has been quite normal, which is saying something in this space. We’ve expected it’s going to take a little longer than average to get through the SEC for somebody like us.”