The U.S. Consumer Financial Protection Bureau (CFPB) is considering a regulation that might oblige cryptocurrency service providers to refund users whose funds have been stolen due to illegal actions such as hacking.
On January 10th, the Consumer Financial Protection Bureau (CFPB) suggested a new regulation, which might extend the same safeguards afforded to traditional bank accounts to personal accounts or digital wallets that utilize modern payment systems.
As a researcher, I’m exploring the idea that the safeguards enshrined within the Electronic Fund Transfer Act (EFTA), designed to prevent errors and fraud, could extend their protection to consumers engaging in transactions involving stablecoins or any other digital assets functioning as a medium of exchange or a means of payment for goods and services. In essence, I aim to ensure that the principles guarding against error and fraud in traditional electronic transfers apply equally to these emerging financial instruments.
According to the proposed rule, it has been understood for some time that the word ‘funds’ in EFTA is not only limited to traditional currencies such as US dollars. The CFPB interprets this term more broadly, encompassing assets that function like money – they can be exchanged, valued, or used for transactions.
Under President Joe Biden’s upcoming departure on January 20th, the action being discussed might be one of the final actions taken by the Consumer Financial Protection Bureau (CFPB). Notably, Tesla CEO Elon Musk, who was a close advisor to President-elect Donald Trump and may have a role in his administration, proposed in November that the CFPB should be discontinued.
Crypto stolen from hacks increased from 2023
As a researcher, I’ve noticed an alarming trend emerging from blockchain security reports published in January of 2025. These reports have highlighted substantial financial losses due to illegal activities involving cryptocurrencies during the previous year. For instance, PeckShield has disclosed that over $2 billion worth of crypto was stolen through hacks alone. On the other hand, CertiK pointed out that phishing attacks were the leading cause of financial losses in the crypto sphere during 2025, making them the most damaging attack vector in this context.
It’s uncertain whether these attacks might intensify by 2025, assuming growth continues, but the suggested CFPB rule could impose a substantial financial strain on cryptocurrency businesses if implemented. U.S.-based companies may be compelled to keep large sums of money, potentially running into millions or billions, in reserve as insurance for user funds that might get compromised.
The Consumer Financial Protection Bureau (CFPB) accepted public comments on their proposed rule up until March 31, which was approximately two months into President Trump’s term.
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2025-01-10 20:03