The Consumer Financial Protection Bureau has proposed a rule that would require U.S. cryptocurrency companies to refund customers who lose funds due to hacks or unauthorized transactions.
he proposal aims to extend the consumer protections already in place for traditional bank accounts to digital wallets used for cryptocurrencies, according to Financial Times reporting.
The CFPB’s rule seeks to expand the scope of the Electronic Fund Transfer Act to cover digital assets such as stablecoins — crypto tokens designed to maintain a stable value — and other fungible tokens used for payments.
If adopted, the expansion would redefine “funds” to include assets that act as money or are used to pay for goods and services.
Cryptocurrency accounts, often referred to as wallets, allow users to store digital currencies and make transactions. Unlike traditional bank accounts, however, these wallets are not universally protected against losses resulting from hacking or fraud.
The CFPB’s proposal would change that, requiring service providers to compensate customers for stolen funds.
Crypto hacks
The proposal comes amid a surge in cryptocurrency hacking incidents. Blockchain analytics firm Chainalysis reported 303 crypto hacks in 2024, resulting in $2.2 billion in stolen funds.
North Korean groups were responsible for over $1.6 billion of these losses, doubling their theft from the previous year.
The CFPB’s proposal marks one of the final crypto-related initiatives from the Biden administration. However, its future remains uncertain as the incoming Trump administration, which has shown strong support for the crypto industry, prepares to take office.
Several Trump advisers, including Elon Musk and Vivek Ramaswamy, have publicly criticized the CFPB, calling for its reduction or elimination.
Public comments on the CFPB proposal are open until March 31, after which the bureau will decide whether to issue a final rule.
