- ConsenSys CEO Joe Lubin revealed how the company survived Operation Chokepoint 2.0.
- ConsenSys’ banking partner resisted closing its account until the pressure became unavoidable.
- Crypto de-banking concerns have reached Congress, with industry leaders calling for investigations into the crackdown.
ConsenSys, the Ethereum-focused software company, has been a victim of U.S. authorities’ pressure to de-bank crypto-related businesses not once but twice. Despite these challenges, founder and CEO Joe Lubin reveals how the company managed to withstand the attacks with significant help from its banking partner.
Surviving “Chokepoint 2.0”: Multiple Bank Accounts
Notably, Operation Chokepoint 2.0 launched during President Biden’s administration. It targeted the crypto industry with efforts to remove them from the financial system, especially by pressuring banks to shut down crypto business accounts. (Operation Chokepoint 2.0 is a term used by some in the crypto industry to describe alleged government pressure on banks to cut ties with crypto businesses.)
Lubin shared in an interview that ConsenSys weathered the storm by having multiple backup accounts, ensuring its operations weren’t disrupted despite the threats.
Lubin explained that while the company was under pressure, its bank, whose name he declined to disclose, resisted the efforts to close ConsenSys’ account.
“The bank told us they were under pressure to shut down our account, even though we’re a $7 billion company and have always been an excellent customer for them,” Lubin said.
Although the bank tried to delay the inevitable as long as possible, the weight of the pressure eventually led to the account’s closure.
Related: David Sacks Joins Call to Investigate Operation Choke Point 2.0
A Previous Run-In, and a Surprising Turn
Meanwhile, Lubin’s first run-in with Operation Chokepoint was much quicker and more impersonal. He recalled that an earlier banking partner closed his personal and company accounts with a brief letter, giving little explanation.
However, there was a twist in the saga following Donald Trump’s election victory. Lubin shared a more positive outcome after the election when the same bank he identified as Wells Fargo through anonymous sources reached out to ConsenSys’ finance team.
The bank’s relationship manager invited them to a basketball game, signaling a shift in the relationship. Despite the eventual closure of their accounts, things felt more amicable after the election.
Crypto De-Banking: A Growing Concern
Crypto de-banking has been a hot topic lately, especially with prominent industry figures like Andreessen Horowitz’s Marc Andreessen and Ripple’s Brad Garlinghouse speaking out about it.
Related: Ripple CTO Blasts Chokepoint 2.0: ‘A Despicable Evil’ in Crypto Banking
Recently, the issue garnered attention in Congress, where hearings are taking place to address these pressures on the industry. In December, the White House crypto Czar David Sacks called for an investigation into Operation Choke Point 2.0 shortly after his appointment.
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