CFPB Shutdown Sparks Debate as Crypto Leaders Applaud Regulatory Rollback – CryptoMode
The Consumer Financial Protection Bureau (CFPB) has effectively shut down operations following a sweeping directive from acting director Russell Vought. This move has drawn praise from crypto industry leaders and criticism from consumer advocates. With the agency’s enforcement activities halted and funding cut off, its ability to oversee financial institutions—including crypto exchanges—has been significantly weakened.
Vought, appointed by President Donald Trump, issued a directive ordering all CFPB staff to cease supervision and enforcement activities, effectively neutralizing the agency. The move was met with enthusiasm from figures like Coinbase CEO Brian Armstrong and Gemini co-founder Tyler Winklevoss, both of whom have frequently criticized the CFPB’s regulatory reach.
Crypto Industry Reacts to CFPB Shutdown
Winklevoss reacted on X with a simple post reading, “CFPB Unplugged”, while Armstrong took a more aggressive stance, calling the move “100% the right call” and labeling it as an “activist organization” that should not exist.
He further argued that fraud enforcement should be the responsibility of the Department of Justice and existing financial regulators rather than a separate consumer watchdog.
The crypto industry has long clashed with the CFPB, particularly Coinbase, which has received more consumer complaints from the agency than any other U.S. exchange. The agency’s database shows over 7,600 complaints related to Coinbase, compared to 487 against Gemini and 297 linked to Kraken.
Many of these reports involve restricted accounts, unresolved missing funds, and poor customer support. Blockchain investigator ZachXBT recently revealed that Coinbase users have lost over $65 million to social engineering scams since December 2024.
However, Coinbase has defended itself, attributing the rise in account restrictions to an influx of new and reactivated users following the U.S. elections while maintaining that its fraud prevention measures remain in place.
With the CFPB’s funding now frozen and its enforcement powers essentially dismantled, the agency’s future remains uncertain. While crypto firms may benefit from a reduced regulatory burden, traditional watchdogs like the SEC and DOJ remain active, meaning that exchanges and digital asset companies are unlikely to escape scrutiny entirely.
