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Crypto Faces New Oversight with Possible EFTA Application in U.S.

The U.S. Consumer Financial Protection Bureau (CFPB) is considering how the Electronic Fund Transfer Act (EFTA) might be applied to cryptocurrency platforms, a move inspired by a desire to strengthen consumer protections. This consideration comes in the wake of significant security breaches on platforms such as Axie Infinity,, and FTX.

Consumer Protection Amid Crypto Vulnerabilities

The Consumer Financial Protection Bureau (CFPB) in the U.S. is examining the possibility of extending the Electronic Fund Transfer Act (EFTA) to cryptocurrency platforms. This proposal seeks to heighten the protection of consumers, especially following notable security breaches on prominent crypto platforms, including Axie Infinity,, and FTX.

Rohit Chopra, the Director of CFPB, discussed this development at a conference hosted by The Brookings Institution. He underscored the necessity of scrutinizing the operational protocols of significant tech companies, particularly focusing on their management of user data and their strategies surrounding the endorsement or launch of private digital currencies. These conversations are arising from increasing concerns about the crypto sector’s vulnerability and the frequency of unauthorized transfers.

EFTA’s Role in Shaping Digital Currency Conduct

The CFPB is considering offering more detailed guidelines that outline the specific responsibilities and limitations imposed by the EFTA on digital currencies and those managing them. Enhanced clarity in this realm is anticipated to foster a more secure environment for both investors and operators in the crypto space.


Chopra emphasized the need for enhanced financial stability within the cryptocurrency ecosystem. Referencing a 2021 report, he alluded to the Financial Stability Oversight Council’s potential role in deeming certain crypto activities as essential for payment and settlement processes, aligning with the Dodd-Frank Act. This consideration might lead to stricter regulations, ensuring that offerings like stablecoins maintain their inherent stability.

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The CFPB is also poised to release a rule concerning personal financial data rights, marking a pivotal step towards fostering transparency in banking and highlighting the imperative for robust user data protection structures. This initiative mirrors the broader objective of reinforcing security protocols amidst the evolving landscape of digital currencies and financial technologies

Redefining Cryptocurrencies as “Funds”

A new perspective is unfolding in the crypto space with SDNY Judge Denise Cote expressing a view that classifies cryptocurrencies under the “funds” category. Adopting this perspective could lead to a paradigm shift, ushering cryptocurrency platforms into the regulatory realm governed by the Electronic Fund Transfer Act (EFTA).

Such an inclusion would enhance consumer protection measures substantially, offering an additional layer of security to cryptocurrency holders. However, it would also imply stricter compliance requirements for crypto exchanges. The introduction of a comprehensive regulatory framework would necessitate these platforms to adhere to specific standards, ensuring the safety and security of consumers’ digital assets.

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As the CFPB intensifies its scrutiny of the dynamic cryptocurrency environment, both industry stakeholders and consumers are on the lookout for detailed policy guidelines. The potential classification of cryptocurrencies as “funds” is indicative of a maturing regulatory environment that seeks to balance innovation with the imperatives of consumer protection and financial stability.

This progression underscores a pivotal moment in the crypto industry’s evolution, where regulatory clarity and consumer safety are becoming paramount. The anticipation is palpable, with every stakeholder, from individual investors to large-scale exchanges, awaiting directives that will shape the future trajectory of the cryptocurrency ecosystem.

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Donald Haymatter

Donald Haymatter is an expert broker with 15+ years of experience. He stays up-to-date with the latest financial news and trends to help clients make informed investment decisions. Donald is known for his analytical approach and personalized investment advice. Outside of work, he enjoys reading and mentoring young professionals.

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