CFPB Jurisdiction Over Crypto Strongly Is Now Criticized By Coinbase

Key Points:

• Coinbase opposes the Consumer Financial Protection Bureau’s (CFPB) attempt to regulate digital assets.
• Crypto leaders express worry about the CFPB jurisdiction over crypto, fearing added complexity and statutory conflicts alongside existing oversight by the SEC and CFTC.

According to DLNews, Coinbase, a leading cryptocurrency platform, has voiced its concerns over the Consumer Financial Protection Bureau’s (CFPB) attempt to regulate digital wallets and encryption software.

Coinbase Challenges CFPB Jurisdiction Over Crypto

Coinbase argues that the CFPB is overstepping its authority by intervening in the already-regulated cryptocurrency field.

The cryptocurrency sector is already under the scrutiny of various regulatory bodies, such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN). Coinbase questions the necessity of the CFPB jurisdiction over crypto, adding to the regulatory complexity that already exists.

Coinbase’s Chief Legal Officer, Paul Grewal, asserted that the CFPB lacks the authority it claims over crypto-assets. Industry leaders fear that the proposed regulations may lead to statutory contradictions, creating further confusion in an already uncertain regulatory landscape.

The CFPB’s proposal, primarily designed to regulate tech giants like Google and Apple in the payments sector, has alarmed the crypto industry as it appears to encompass digital assets broadly. Crypto advocates argue that the proposal’s wording is so comprehensive that it could unintentionally include crypto wallet providers and software developers.

This move by the CFPB is seen by industry insiders as part of a larger regulatory turf war over crypto. Coinbase and allies emphasize that there were supposed to be statutory limits to the CFPB jurisdiction over crypto when it was enacted as part of the Dodd-Frank Act in 2009. They contend that the industry is already subject to ample regulation from agencies like the SEC and CFTC.

As the crypto industry faces increasing regulatory pressures, Coinbase and its allies are taking a stand, arguing that the CFPB’s proposal is unnecessary and would only add to the confusion and challenges faced by industry participants.