The Consumer Financial Protection Bureau (CFPB) issued a new advisory today focused on bitcoin and other digital currencies. The report is similar in content and tone to many consumer-focused warnings published by regulatory bodies across the globe over the last year, with a focus on potential scams, security issues and other well-known cryptocurrency dangers. The tone wasn’t entirely critical, however, as the report also noted that “virtual currencies offer the potential for innovation,” even if some critical issues remain unresolved.
The CFPB is tasked to provide essential oversight for financial service companies, such as mortgage lenders and credit unions, but is not yet formally tasked with the oversight of the cryptocurrency industry. Today’s publication seems largely aimed at providing a counterpoint to a recent uptick in hyperbole-laden promotional and marketing material around bitcoin, and serving as a reminder that bitcoin is something of an investment “Wild West” at the moment. The issue is highly relevant as bitcoin takes to the mainstream, as many investors may be assuming that existing laws protecting investments and accounts apply to digital currency. With no such protections on the books, the CFPB is likely to bear the brunt of investor complaints.
With that in mind, the CFPB is also in the process of creating a new complaint center for virtual-currency related consumer problems. The agency said it will “work to get a response” to complaints within its jurisdiction, and will work with regulators and other authorities outside of its jurisdiction when “appropriate.”