Quick Facts:
- The CFPB is reducing its oversight authority, loosening enforcement actions against crypto lenders.
- Coinbase CEO Brian Armstrong and Gemini’s Tyler Winklevoss praised the change, calling it a win for financial freedom.
- Under former CFPB head Rohit Chopra, the agency increased scrutiny on digital asset firms, citing fraud and financial risks.
- The decision is part of the Trump administration’s larger push to cut crypto regulations and boost blockchain innovation.
The crypto industry is rallying behind a major shake-up at the Consumer Financial Protection Bureau (CFPB) as the agency scales back its oversight under the Trump administration. The CFPB faces an uncertain future as Russell Vought, the agency’s acting head and a key figure in the Project 2025 policy initiative, has reportedly instructed employees to halt all supervision and examination activities. Vought also announced on X that the CFPB would not request future funding from the Federal Reserve, a decision that could render the agency inoperative once its 2025 funding runs out.
“Pursuant to the Consumer Financial Protection Act, I have notified the Federal Reserve that CFPB will not be taking its next draw of unappropriated funding because it is not “reasonably necessary” to carry out its duties.” Vought said
The move has been met with applause from crypto executives, with Gemini CEO Tyler Winklevoss posting an image of a CFPB 404 error page on X with the caption “CFPB Unplugged.”
Coinbase CEO Brian Armstrong also reacted, calling the agency unconstitutional and arguing that it should be completely abolished.
“100% the right call.The CFPB is unconstitutional on the face of it. And even if it wasn’t, it should be deleted as we already have DOJ to prosecute fraud, and (many) other financial services regulators. It’s an activist organization that has done enormous harm to the country.” He said in response to an Elon Musk post on the matter.
The CFPB has long been a point of contention for crypto firms, with critics arguing that its enforcement of consumer protection laws unfairly targeted digital asset platforms. Under Rohit Chopra’s leadership, the agency ramped up scrutiny of crypto lenders, citing concerns over fraud and financial stability risks—actions that many in the industry saw as government overreach.
CFPB’s Power Cut Amid Trump’s Pro-Crypto Shift
The overhaul of the CFPB’s authority is one among broader deregulation efforts under President Trump’s administration, which has taken steps to scale back enforcement actions by other agencies like the SEC. Since the Inauguration of Donald Trump, a flurry of movements have been seen, championed by the Elon Musk Led Department of Government Efficiency (DOGE). The Security and Exchange commission also reportedly reduced the number of staff assigned to its Digital asset regulation arm last week, under the leadership of acting Commissioner Mark Uyeda. In the same light, the CFTC under the leadership of Commissioner Pham has reinstated its desire to have a round-table discussion with stakeholders, in order to cut back on its stringent regulatory practices.
Despite the Supreme Court ruling in May 2024 affirming the constitutionality of the Consumer Financial Protection Bureau’s (CFPB) funding mechanism, the agency’s power has still been significantly curtailed under the Trump administration.
