The Consumer Financial Protection Bureau (CFPB) is anticipated to have a diminished role in cryptocurrency regulation, as federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume greater responsibilities in shaping crypto policy.
Ethan Ostroff, a partner at Troutman Pepper, highlighted this transition, noting that the current administration is likely to witness the CFPB stepping back in favor of other regulatory bodies.
Ostroff explained that state regulators, empowered by the Consumer Financial Protection Act (CFPA), could take over some CFPB roles. However, certain regulatory duties will remain with the CFPB due to established legal frameworks.
He identified the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as key state entities poised to lead in crypto regulation.
Despite this expected reduction, Ostroff clarified that the CFPB would not be dismantled under U.S. President Donald Trump’s administration. Its existence is protected by statutory obligations requiring Congressional intervention for major changes.
