Chia Network Faces Staff Reduction and IPO Delay Amid Banking Setback
Chia Network has made the difficult decision to let go of 26 out of its 70 employees, in a move to recalibrate its lost banking partnership with Credit Suisse. This development has further impeded Chia's ambitions of swiftly transitioning into a publicly listed company. The blockchain platform had initially sought a U.S.-compliant avenue for its listing on an American exchange.
CEO Gene Hoffman expressed regret over the necessity of the layoffs, attributing them to a challenging funding climate over recent months. He clarified that the focus was primarily on "ecosystem support," as opposed to sales and marketing.
In tandem with this restructuring, Chia is considering the sale of a portion of its token reserve, XCH. Hoffman clarified that this action would serve as a supplementary funding source on the path to its initial public offering (IPO), rather than a significant divestment.
Regarding its IPO aspirations, Chia recently established a new banking relationship with a U.S. institution. However, despite this positive development, the company still faces an uncertain regulatory journey. The negotiations with the U.S. Securities and Exchange Commission (SEC) are in their early stages, and the timeline remains unpredictable.
Chia's interaction with the SEC has followed a relatively standard course, considering the complexities of the crypto space. Hoffman acknowledged that the process might extend beyond the average duration for a company of their profile.
It's worth noting that the SEC has previously greenlit Coinbase Inc.'s public listing, although it later initiated an enforcement action against the exchange for alleged securities law violations.
In the backdrop, potential government budget-related issues could introduce further delays in the SEC's proceedings, as the federal government faces a looming shutdown. This could potentially impact Chia's filing, placing it in the hands of a skeletal staff within the SEC, as highlighted by SEC Chair Gary Gensler's recent testimony.
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