Algorand laid off 25% of its employees the day after the SEC confirmed that ALGO was not a security.

The Algorand Foundation has laid off 25% of its staff, citing the difficult global macro environment and broader cryptocurrency market downturn. The cuts come just one day after one of the most positive regulatory developments in the project’s history, a stark contrast the community cannot afford to miss.

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In confirming its decision on X, the Foundation explained that the decision on The statement emphasized that the affected employees were best-in-class contributors and that the foundation was committed to supporting them through the transition.

The organization said it now believes the restructured team represents a more sustainable foundation for executing Algorand’s technology, business and ecosystem goals moving forward.

“We believe we can now more sustainably align Algorand Foundation resources with the protocol’s long-term business, technology and ecosystem priorities.

“These employees have been the best contributors to this ecosystem and the foundation, and this was an incredibly difficult decision. We are truly grateful to them and, of course, are committed to supporting them through this transition,” they said.

SEC development came first

A day before the layoffs, the SEC and CFTC issued groundbreaking joint guidance classifying various cryptocurrency assets as digital instruments rather than securities. ALGO was included in that category.

Some community members initially questioned whether ALGO’s appearance in the footnotes rather than the body of the guidance diminished its importance. The Algorand Foundation directly objected to that reading.

Footnote placement has not been downgraded. Although the SEC used futures-linked tokens as an example in its text, it explicitly stated that futures-linking is not a test of commodity status. ALGO was specifically cited to demonstrate that a token can qualify as a digital commodity without being connected to a futures market at all.

What this means

ALGO fell along with the broader market but remains in a cleaner regulatory position than it was 48 hours ago. Layoffs reflect genuine financial pressures caused by difficult market conditions. SEC guidance reflects real progress in the regulatory arena.