Biden Advocates for Controversial Crypto Regulation in His Final Days as President of the United States
The Consumer Financial Protection Bureau (CFPB) recently released a proposal that targets cryptocurrency wallet providers such as MetaMask and Phantom, in a contentious development during President Joe Biden’s final days in office.
The rule aims to designate digital wallet providers as financial institutions under the Electronic Funds Transfer Act, which could potentially subject them to liability for illicit or unauthorized transactions.
CFPB Director Rohit Chopra underscored the necessity of consumer protection in the expanding digital payments sector, asserting that users should have confidence in the security and absence of errors of their transactions. Nevertheless, it is widely anticipated that the proposal will encounter opposition and may be canceled upon the inauguration of the Trump administration, which is renowned for its more pro-crypto attitude.
In the crypto industry, critics have compared the move to the unjust penalization of tool manufacturers for the exploitation of their products. Joey Krug of Founders Fund likened it to enforcing accountability on the manufacturer of a weapon for its utilization. Many also perceive this as an extension of Senator Elizabeth Warren’s overarching anti-crypto agenda. Warren, a long-standing critic of the digital asset sector, was instrumental in the establishment of the Consumer Financial Protection Bureau (CFPB) and has since impacted its trajectory.
Analysts assume that the proposed rule will have a slim chance of surviving as the Trump administration prepares to assume office. Chopra, a Warren ally, is anticipated to be dismissed by the administration, and the CFPB will be redirected away from the heavy-handed control of digital assets. In stark contrast to Biden’s cautious policies, the upcoming administration has signaled a more favorable approach to the crypto industry, despite the fact that Republicans have historically criticized the CFPB.
Also Read: Indian authorities capture a suspect associated with a crypto fraud scheme
