The top US consumer watchdog said on Tuesday it plans to intensify its scrutiny of the use of cryptocurrencies.
The Consumer Financial Protection Bureau (CFPB) said it is worried about real-time crypto payments as more digital assets exchanges and lenders fall foul of regulations.
Crypto has come under increasing scrutiny in recent months after the market cratered, toppling some companies. and leaving customers holding worthless assets.
The CFPB is following other US regulators into probing crypto more deeply. This week, reports suggested the US Treasury Department’s Office of Foreign Assets Control was investigating Kraken for suspected violations of Iran sanctions.
Another big exchange, Coinbase Global, is being probed by the Securities and Exchange Commission (SEC) into whether it improperly allowed the trading of digital assets as securities.
The CFPB also has Big Tech companies in their sights as they expand into the traditional financial sector, its director said.
Big online companies could drive the widespread adoption of crypto for real-time payments, which would be a “heavy” focus for the agency, said Chopra, adding that the agency is concerned about the risks of hacks, errors and fraud.
“The regulators all had a wake-up call when Facebook proposed its Libra project, which potentially could be a currency that rapidly scaled across Facebook’s networks,” Chopra said.
That prompted the agency last year to ask Facebook, Amazon.com, Apple and Alphabet’s Google to provide information on how they gather and use consumer payment data, he said. Facebook ultimately abandoned Libra due to regulatory opposition.
- Reuters, with additional editing by George Russell