CFPB signs of setback in cryptocurrency rulebook as SEC's influence grows

The U.S. Consumer Financial Protection Bureau (CFPB) is likely to gradually back away from cryptocurrency regulation as the Trump Administration works to shrink the government bureaucracy.
The CFPB’s role in regulating crypto assets (virtual currencies) is likely to be reduced, leaving the Securities and Exchange Commission (SEC) and state regulators to play a more active role in cryptocurrency policy.
It was reported that he is expected to play a major role.
Ethan Ostrov, a partner at the Locke Law Firm
"Under the current tone of the administration, it's likely that the CFPB will take a major step back from cryptocurrency-related regulations," Ostroff said in an interview with Cointelegraph on the 3rd.
"This is because other regulatory agencies are very active," he said. "Under the Consumer Financial Protection Act (CFPA), state governments can take over some of the CFPB's regulatory authority.
" He added that state agencies such as the New York Department of Financial Services (NYDFS) and California's Department of Financial Protection and Innovation (DFPI) are likely to take the lead in regulating cryptocurrencies going forward.
He also explained that while the CFPB's role would be reduced, it would not be possible to completely dismantle it because it still has statutory obligations, and some regulatory functions would likely continue to be maintained.
The change was made as the Trump administration seeks to cut the budget and reduce the federal debt, primarily through the Office of Government Efficiency (DOGE).
Shortly after taking office, President Russell Vought implemented major budget cuts and downsizing.