The U.S. Consumer Financial Protection Bureau (CFPB) has recently undergone major changes, with Acting Director Russ Vought ordering a halt to regulatory and enforcement actions, and refusing to apply for funding from the Federal Reserve (Fed), effectively weakening the CFPB's operational capacity, sparking widespread discussion. The CEOs of well-known crypto exchanges Coinbase and Gemini have expressed approval, and even Elon Musk has voiced his support.
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ToggleCFPB's regulatory oversight significantly reduced, Acting Director halts enforcement, refuses to apply for funding
The CFPB is currently facing an existential crisis, stemming from the latest decisions made by Acting Director Vought. He was previously involved in the 2025 policy initiative and has taken a conservative stance. However, upon taking office, he has quickly taken aggressive measures against the CFPB, including:
- Suspending all regulatory and enforcement actions, effectively stripping the CFPB of its actual supervisory capabilities.
- Refusing to apply for future funding from the Fed, which could render the CFPB unable to operate normally after its 2025 budget is exhausted.
This decision has led the public to believe that Vought intends to weaken the CFPB's power, rendering it incapable of effectively performing its regulatory functions.
Coinbase, Gemini CEOs applaud the decision, Musk also expresses support
Vought's actions have also received support from the crypto community and Elon Musk. Gemini CEO Tyler Winklevoss tweeted a screenshot of the CFPB website's "404 error page", captioning it "CFPB Unplugged", implying that the CFPB's powers are about to be removed.
Coinbase CEO Brian Armstrong went even further, stating: "This decision is 100% correct! The CFPB is unconstitutional and should be abolished." He believes that the Department of Justice (DOJ) already handles financial fraud, making the CFPB a redundant and harmful organization.
Elon Musk also expressed support, stating that while the CFPB has done some good things, it should still be abolished. He had previously criticized the agency as a "redundant regulatory body" that serves no real purpose.
Supreme Court rules CFPB is constitutional, but Director can still weaken its operations
The CFPB's funding source has long been a point of contention. Since the CFPB's budget comes from the Fed, rather than direct congressional appropriations, many have questioned its constitutionality. However, in a ruling in May 2024, the U.S. Supreme Court upheld the CFPB's funding mechanism as "constitutional" by a 7-2 vote.
However, this does not guarantee the CFPB's smooth operation, as the Director has the authority to decide whether to apply for funding from the Fed. Vought's actions effectively limit the CFPB's funding source, and even if the law allows its operation, it may be crippled in practice due to a lack of resources.
Coinbase receives the most complaints, 7,600 CFPB complaints mention Coinbase
It is worth noting that among the consumer complaints handled by the CFPB, Coinbase has received far more complaints than other exchanges, with the following data:
- Coinbase: 7,600 complaints.
- Gemini: 487 complaints.
- Kraken: 297 complaints.
Additionally, on a Reddit discussion forum officially managed by Coinbase, many users have shared their experiences of filing complaints with the CFPB. According to CFPB regulations, companies should respond to consumer complaints within 15 days. However, this discussion forum was locked 6 days ago, and only approved users can post, with no new posts appearing currently.
Coinbase's Ongoing Controversies and Questioned Customer Support
Coinbase's customer service has long been criticized, especially in terms of security. On 2/4, on-chain detective ZachXBT pointed out that since last December, Coinbase users have lost $65 million due to social engineering scams, once again raising concerns about Coinbase's risk management. Currently, neither Coinbase nor Gemini have issued an official response to this incident.
Risk Warning
Crypto asset investments are highly risky, and their prices may fluctuate dramatically, and you may lose your entire principal. Please carefully evaluate the risks.
