Consensys Faces Banking Challenges Amid Regulatory Pressure
Consensys, the renowned Ethereum software developer widely recognized for its MetaMask wallet, has encountered significant hurdles from U.S. authorities aiming to restrict its access to the financial system. Despite these challenges, the company’s founder and CEO, Joe Lubin, revealed in a recent interview that they managed to navigate through these turbulent times, particularly during what is referred to as Operation Chokepoint 2.0.
This initiative specifically targets the debanking of cryptocurrency firms and their executives, a consequence of pressure from regulatory agencies under the Biden administration, including the Federal Deposit Insurance Corporation (FDIC). Lubin disclosed that Consensys’ banking partner, which he chose not to name, faced considerable external pressure to terminate their account. “The bank indicated to us they were getting a lot of pressure to shut down our account: a $7 billion company that has always been an excellent customer for them,” he stated. “They essentially communicated, ‘We value our relationship with you. We don’t want to proceed with this closure. We will attempt to delay the process as long as possible and keep you updated if we must take action.’”
The original Chokepoint initiative, launched during the Obama administration by the Department of Justice, aimed to sever access to banking services for businesses that, while legal, were politically disfavored, such as payday lenders and gun dealers. In recent months, the topic of crypto debanking has gained traction, with prominent figures like Marc Andreessen, the head of Andreessen Horowitz, and Brad Garlinghouse, CEO of Ripple, openly discussing these challenges. This week, the issue has captured the attention of Congress, as a series of hearings reflect a significant shift in the digital asset industry’s approach to policy under the Trump administration’s previous resistance in Washington.
Joe Lubin’s remarks highlight that some banking institutions have indeed strived to resist the mounting pressure from U.S. regulators. However, despite their best efforts, the weight of the external pressure ultimately became overwhelming, leading to an unfortunate outcome. “The bank finally said, ‘We can’t do anything more. We’re going to have to shut down your account. We sincerely apologize for this,” Lubin recounted.
According to a source familiar with the situation, the U.S. bank involved was Wells Fargo, although the bank has since declined to comment on the matter. However, this was not the conclusion of the story. Following the election victory of Donald Trump in November, the bank’s relationship manager reached out to Consensys’ chief financial officer. “The day after the election, the bank contacted one of our finance team members and asked, ‘Hey, can we take you to a basketball game?’” Lubin recalled.
The company had previously experienced a more abrupt episode of Chokepoint with another banking partner. “That was a different bank,” Lubin noted without disclosing its name. “They unceremoniously closed both my personal and the company account. All we received was a rather generic letter explaining the closure. That was the extent of their communication.”
