CFPB not planning crypto crackdown, says Bureau Director Chopra

The Consumer Financial Protection Bureau is not planning an immediate crypto crackdown, its director said today, while choosing his words carefully.

“Crypto is not a product. Certain electronic consumer transactions are,” CFPB Director Rohit Chopra told The Block after an hours-long congressional hearing.

Digital asset policy came up frequently during a regular appearance by Chopra before the House Financial Services Committee, including further prodding around whether a recently published consumer alert bulletin related to crypto meant the bureau would step up enforcement on crypto companies. 

“Do you anticipate expanding your enforcement in this area?” asked Rep. Bill Huizenga, R-Mich., referring to those reports.

“No,” answered Chopra.

The bureau has also moved ahead on an inquiry into crypto lender Nexo, which led to the company’s announcement that it would gradually leave the U.S.

When asked after the hearing about the Nexo investigation, Chopra would not comment beyond what the regulator had already filed on the case.

Stablecoin framework

Asked by committee Chair Maxine Waters, D-Calif., what legislation he thought Congress should pass around digital assets, Chopra agreed with Waters' own prioritization of a regulatory framework around stablecoins.

“I think with respect to stablecoins, that’s the number one issue that I think would affect consumers and consumer financial protection,” said the CFPB director, adding that stablecoins could “very, very rapidly scale” in size, requiring policymakers to “make sure that there are not runs like we’ve seen in money market funds or even the recent FTX situation. How do we make sure that fraud protections are in place?”

“You know when Libra was proposed in 2019, I think that was a sign that something like a stablecoin could very, very rapidly scale,” Chopra continued.