- ConsenSys has had to cope with two bank account closures as part of “Operation Chokepoint 2.0”, motivated by pressure from US regulators on financial institutions running crypto-currency businesses.
- To continue operations, MetaMask relies on backup accounts, while ConsenSys continues its decentralization efforts through the Linea association and a forthcoming governance token.
ConsenSys is once again facing pressure from the banking world, its bank accounts having been closed on two occasions as part of an operation dubbed “Operation Chokepoint 2.0”. More recently, the major bank Wells Fargo reportedly closed its accounts under pressure from US financial authorities.
Consensys has been hit twice by Operation Chokepoint and had its bank accounts cancelled, the most recent case involving Wells Fargo. Consensys' MetaMask relies on additional backup accounts to maintain operations, and Lubin himself has become a target of attack.…
— Wu Blockchain (@WuBlockchain) February 7, 2025
MetaMask survives, banks retreat
Ironically, the banks that closed the accounts initially sought to postpone the decision. But official pressure from the likes of the Federal Deposit Insurance Corporation (FDIC) left them with few options. MetaMask – ConsenSys‘ flagship product – was forced to rely on back-up accounts to continue operating while their main accounts were frozen.
In this context, ConsenSys CEO Joseph Lubin was also at the center of attention. Not only was the company under strain, but so was the man behind it.
Operation Chokepoint 2.0: An attack on crypto-currencies?
For crypto players, Operation Chokepoint 2.0 is nothing new. It’s a continuation of the US government’s past policy of restricting access to financial services for companies deemed dangerous. The cryptocurrency sector is now the focus of attention.
ConsenSys is not the only one under pressure. Many major players in the crypto space have also reported similar difficulties, with banks unwilling to authorize their transactions or even close their accounts abruptly.
Interestingly, the bank that closed ConsenSys’ account contacted them once the results of the US presidential election were revealed in November. This action raises several questions: Is this policy purely political? Or are there other factors that have yet to be uncovered?
The regulatory crisis and its impact on the crypto-currency industry
Conversely, regulatory difficulties are the main cause of the difficult decisions that companies in the crypto sector have to make. In October 2024, ConsenSys announced that it was shedding around 162 employees, or roughly 20% of its workforce.
The main justification for this choice is regulatory pressure and dubious macroeconomic conditions. The absence of clear legal certainty forces crypto companies to constantly adapt to sometimes changing and unpredictable policies.
New directions: Plans for the Linea association and governance token
This does not mean, however, that ConsenSys is living without innovation. CNF previously announced the creation of the Linea Association to help with the decentralized governance of its zkEVM Layer 2 system.
By early 2025, the association will launch a governance token, enabling the community to take part in managing the protocol. Despite regulatory hurdles, ConsenSys is finding ways to maintain its place in the decentralized world.
The future of ConsenSys: between threats and opportunities
One thing is certain: the cryptographic space has never been immune to rapidly changing dynamics. From regulatory pressures to financial disconnects to decentralization projects, it’s all a reflection of how the sector is constantly changing and adapting.
Although Lubin and his group are currently facing great difficulties, they can still survive – and perhaps emerge victorious from this battle – with the right plan. As has already happened, decentralization and creativity can be the main weapons against outside pressure.
