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The Consumer Financial Protection Bureau (CFPB) has proposed a new interpretive rule granting them the authority to go after crypto wallet companies as financial institutions.
What’s The Scoop?
- Proposed Rule: The proposed rule would hold wallet providers like
MetaMask and 
Phantom responsible for fraudulent transactions. - Generation of CFPB: The CFPB was created in response to the 2008 financial crisis to protect consumers from malicious financial institutions
- MetaMask Response: Bill Hughes, Senior Counsel at MetaMask, said in a tweet today “Under this regime, the wallet provider and not the consumer would be responsible for any 'unauthorized transfers' including 'transfers initiated by a person who obtained a consumer’s access device through fraud or robbery . . . [or] when a bad actor obtains a consumer’s account credential through computer hacking or other forms of cyber theft and uses that credential to steal funds.'"
Bankless Take
This “new interpretive rule” seems like nothing but a last-minute attempt by Biden administration regulators to go after crypto. The effort will likely be in vain, as few expect the interpretive rule to be enacted once Trump takes office.
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