- ConsensSys is reexamining the future of Token Foundry after the failed Civil sale
- The entity’s CEO is out and there’s been a mass exodus of employees
Count this as another casualty of the 2018 crypto bear market.
ConsenSys, the massive cryptocurrency venture studio led by Ethereum co-founder Joe Lubin, is looking to breathe new life into a floundering project, according to people familiar with the situation. Token Foundry, which provides a platform to help bring new tokens to market, has been struggling in recent months as the bear market grips companies tied to the once sanguine days of 2017. Token Foundry had been one of ConsenSys’ most prominent projects with dozens of staffers at its peak.
ConsenSys operates under a “hub and spoke” model. According to the firm: “The ConsenSys ‘hub’ spawns, incubates, and accelerates ‘spoke’ ventures through development, resource sharing, acquisitions, investments, and the formation of joint ventures.” While Token Foundry is still included as a “spoke” on the firm’s website, it was notably shifted to a “hub” in the October 31 monthly ConsenSys update amidst the project’s reorganization.
The company has also seen a mass exodus of staff. Its chief executive officer Harrison Hines is no longer with the company, several people familiar with the situation told The Block. Token Foundry, which launched in April 2018, has not been able to successfully and consistently build out its platform, completing only four token sales. A number of Token Foundry employees have been let go or have left the unit in recent months, including:
- Janison Sivarajah, software engineer
- Royce Moroch, UI designer
- Andy Moy, capital markets
- Karen Scarbrough, smart contracts
- Sydney Lai, head of strategy
- Sanaya Mirpuri, head of product marketing
- Julia Kimmel, head of talent and human resources
- Mahoney Turnbull, head of community
The firm fired seven employees last week without notice effective immediately, according to a source. Still, ConsenSys is looking at new options for the business and additional services to sustain it through the bear market, a person familiar with the firm’s business said.
“We are expanding our offerings and will continually reassess our positioning to ensure Token Foundry’s future success in this dynamic space,” Jay Thakrar of ConsenSys, said. “Included with our expanded offerings will be an expansion of our team as well to hire for appropriate roles.”
Notably, the firm facilitated the token sale of Civil, the blockchain project aimed at “building the new economy for journalism.” The token sale — a self-proclaimed flop– raised a paltry $1.4 million, according to Token Foundry’s website. That’s far less than the minimum fundraise goal of $8 million and the maximum fundraise goal of $24 million.
“The CVL token sale didn’t succeed. We’re disappointed, but we’re as committed as ever to seeing Civil out in the world,” Civil said in an October 16 blog post.
The market for digital tokens has fallen off a cliff, according to most estimates. A Bloomberg News report found funding via so-called initial coin offerings (ICOs), a way to raise money by issuing a token, fell to its lowest level in 17 months in September.
As noted by Bloomberg, the slump in the ICO market follows comments by regulators in the U.S. that most tokens resemble securities, which means they would have to be registered with the Securities and Exchange Commission.
Mike Novogratz’s Galaxy Digital has pivoted away from ICO advisory work, according to a report by The Block. The merchant bank announced on Friday evening it is shifting its focus from advising small ICO projects to large institutions.
“The Company is adapting to the regulatory framework and the opportunities it is currently seeing, and therefore repositioning its Advisory business from focusing on small ICO advisory and blockchain consulting to instead serve larger, more institutional clients in the space,” the firm said.
ConsenSysFounded in October 2014, ConsenSys has grown at breakneck speed, from an entity with approximately 100 people in early 2016 to more than 1,000 today. In fact, the pace of hiring appeared to be accelerating despite the significant decline in $ETH price over the past 4 months. ConsenSys reportedly had only about 600 employees in Q1 2018 and 900 employees over the summer.
ConsenSys operates a venture production studio focused on building and incubating projects for the Ethereum blockchain. To date, the company has incubated more than 50 Ethereum-based projects including MetaMask, Infura, and AirSwap.
These projects are generally left to operate on their own with ConsenSys supplying financial and resource support. They range from small projects with just a few members to projects that have many dozens of people working on them globally. Furthermore, ConsenSys also provides consulting and education services for its clients through its Solutions and Academy arms.
This article has been updated to clarify a list of employees who are no longer working on Token Foundry.