BitTorrent startup Chia slashes staff with 21% of its population

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BitTorrent startup Chia slashes staff with 21% of its population

The open-source software company, which had boasted of seeking a US-compliant route to establish its listing on a U.S. exchange, informed 26 of its 70 employees today that their jobs were being terminated. The move comes five months after Chia, founded by BitTorrent inventor Bram Cohen, filed with the SEC to begin its process of going public, which partially derailed by the collapse of its bank, Credit Suisse.

While the crypto company slashes its staff, it's also looking to sell its own token, Hoffman said. That 21 million XCH mountain represents almost three quarters of the supply of these coins, with nearly 9 million in current circulation, but Hoffman said that the company would only unload a limited amount as a backup source of funding on the runway to its initial public offering.

Under its structure, Chia has an unencumbered 2.6 million XCH it can easily unload, worth $70 million at the current price, but that value would inevitably be affected by large-scale selling. After the news, the XCH price fell from the day's high to $27.18.

Chia had never sold its tokens because of uncertainty over how the SEC would classify them, Hoffman said, but she said recent court cases involving Ripple and Terraform Labs have demonstrated that a carefully decentralized token can satisfy current standards for defining a digital commodity.

On the IPO front, Hoffman said the firm, which has been working with the World Bank and has tokenized carbon credits, secured a new banking relationship with a U.S. institution at the end of last week. He declined to identify the bank, citing the preliminary stage of the SEC negotiations.

While much of the industry is waging a open legal war with the agency, Chia has tried to walk a tightrope to meet U.S. regulators' expectations. That puts the layer-one provider somewhere in the no-man's-land between Prometheum Inc., a controversial startup trying to establish itself as an SEC-approved trading firm, and most of the rest of the crypto industry that insists the regulators are making it impossible for digital assets businesses to comply.

The regulatory authority may also face its own delays as it faces a potential federal government shutdown caused by a congressional impasse over the U.S. budget. Chia's filing would be in the hands of a'skeletal staff' if that happens, Gensler said.