The Consumer Financial Protection Bureau (CFPB), the top U.S. consumer finance regulator, is exploring whether it can leverage the Electronic Fund Transfer Act (EFTA) to safeguard consumers against fraudulent cryptocurrency transfers.
Speaking at a recent conference, CFPB director Rohit Chopra indicated his agency is looking at extending EFTA protections to “private digital dollars and other virtual currencies.” Passed in 1978, the EFTA limits consumer liability for unauthorized electronic fund transfers.
“To reduce the harms of errors, hacks, and unauthorized transfers, the CFPB is exploring providing additional guidance to market participants to answer their questions regarding the applicability of the Electronic Fund Transfer Act with respect to private digital dollars and other virtual currencies,” Chopra stated.
The CFPB move comes as crypto hacks have surged over 150% versus last year. It also follows the high-profile collapse of FTX, which allegedly misused customer funds and suffered a $400 million hack after bankruptcy.
By applying the EFTA, the CFPB aims to mandate disclosures around consumer liability for unauthorized crypto transfers. This could provide protections amid growing adoption.
Chopra suggested crypto activities may warrant classification as “systemically important payment systems” to enable stricter oversight. “This could provide, for example, other agencies with critical oversight and tools to ensure that a stablecoin is actually stable,” he said.
The CFPB will also gather data from tech firms on crypto business practices to inform regulation. As crypto use explodes, shoring up consumer protections is becoming a priority.
#Crypto #EFTA #CFPB
