The Consumer Financial Protection Bureau (CFPB) in the US is mulling over the application of the Electronic Fund Transfer Act (EFTA) to cryptocurrencies. This move aims to safeguard consumers from fraudulent crypto transfers amidst a surge in crypto-platform hacks. Learn more about the CFPB’s intentions and its implications for the crypto industry.
The Consumer Financial Protection Bureau (CFPB) is exploring the possibility of applying the Electronic Fund Transfer Act (EFTA) to the realm of cryptocurrencies. CFPB Director Rohit Chopra revealed this during a recent payments conference, highlighting the need to protect consumers from fraudulent crypto transfers.
The EFTA, enacted in 1978, was designed to safeguard consumers during electronic fund transfers, encompassing various methods such as debit cards, ATMs, and bank accounts. Its objective is to mitigate consumer losses resulting from unauthorized transfers by obligating financial institutions to disclose liability information before the first electronic transfer.
This move by the CFPB comes in response to a significant year-on-year increase in crypto-platform hacks, surpassing 150%. It also coincides with the ongoing criminal trial of FTX co-founder Sam Bankman-Fried, who faces charges related to fraudulent use of customer funds.
In addition to its interest in cryptocurrencies, the CFPB intends to gather information from large technology companies regarding their data usage and issuance of private currency. The agency also plans to scrutinize non-banking entities offering payment platforms.
Chopra proposed that certain crypto activities should be classified as “systemically important payment clearing or settlement activities” by the Treasury’s Financial Stability Oversight Council.