The recent departure of the U.S. consumer protection regulator has attracted attention due to concerns that market participants, including crypto holders, are left behind by market participants who are feeding.
On June 10, Cara Petersen, acting law enforcement director of the Consumer Financial Protection Bureau (CFPB), reportedly resigned in a stern letter criticizing President Donald Trump’s administration, the “unsurprising” cuts in institutions promoted by the Department of Government Efficiency (DOGE).
Republican lawmakers and the White House have pledged to simplify the CFPB to ensure it protects consumers without killing innovation. Important figures in the crypto industry also attacked the institution. Coinbase CEO Brian Armstrong called it “unconstitutional”.
The U.S. cryptocurrency industry may advocate for weakening of CFPB to win favorable regulations in Washington, but at the same time, its own clients can easily consider frozen and unresponsive platforms without clear agencies to seek help.
Trump’s CFPB reform hits crypto users
Among the U.S. financial regulators, CFPB is a relative newcomer. Senator Elizabeth Warren first proposed the agency in 2007. The institution was eventually founded by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which itself was a reaction to the 2008 sub-mortgage/banking crisis and subsequent recession.
The institution constitutes and enforces rules for banks and other financial institutions, and since its inception, has raised criticism from the laissez-faire government Republicans and the financial industry.
Tesla CEO Elon Musk, who previously led the Doge, released weeks after the election, the agency should “delete”.
Industry legal and advocacy organizations such as Coin Center have posed issues with CFPB rulemaking. In late November 2024, Executive Director Peter Van Valkenburgh welcomed Trump’s “one-day” executive order that began reevaluating institutional rulemaking, including those of the CFPB and the Securities and Exchange Commission.
The pace after Trump was sworn in, with the Governor starting to demolish government agencies and regulators, laying off thousands of federal employees.
Related: CFPB’s top executive exits Trump’s stern email: Report
By February, acting CFPB chief Russell Vought had shut down most agencies and stopped law enforcement operations. The move was praised by cryptocurrencies such as Armstrong, which Armstrong called a “100% appropriate move” and Gemini co-founder Tyler Winklevoss praised.
As Armstrong claims, much of the cryptocurrency industry’s criticism of CFPB is based on its so-called unconstitutionality and its role in hindering U.S. innovation.
Much of the discussion was that thousands of consumers disappeared due to law enforcement actions against wrong banks and financial institutions, including credit card company Capital One and mortgage giant Rocket House.
Encrypted users are also affected. There are only common sockets Received More than 8,000 CFPB complaints. Kraken received 338. On June 2, someone reported the user explain They have been locked in their accounts for several months, and the exchange’s support team did not respond.
David Goose, communications director at Decentralized Exchange Osmosis, explain He was in the “Same Boat” and added that he had filed a complaint with the CFPB.
“This is not the first rodeo to use Coinbase to lock accounts or freeze funds. There is no real recourse for affected users,” he said. additional.
Coinbase did not respond to Cointelegraph’s request for comment at the time of publication.
Advocates who care about consumer protection on legal issues
Ironically, the cryptocurrency industry cheers the institution on its own, which will ensure that users’ protection is not lost to the observer.
The Securities and Exchange Commission, Amanda Fischer, is a former SEC and a member of Congress and adviser, calls this situation “Kafkaesque”. Add to “CFPB is basically dormant, partly because (Coinbase) pushes it to shut down.”
Lauren Saunders, deputy director of the National Consumer Law Center, Called This situation “wholesale abandons consumer protection, and people boycott themselves when credit card companies, banks, payday lenders and payment apps violate the law.”
Doreen Greenwald, President of the NTEU, explain“The only people celebrating the CFPB closure are those who make money by borrowing money or buying goods with credit loans.”
Some advocates of consumer privacy are trying to fight back against the government’s cuts and question the legitimacy of Doge’s actions against CFPB.
After the law enforcement downgrades, the National Finance Ministry Employees Union (NTEU) immediately, the Public Employees Union represents 1,000 workers in the CFPB, Prosecution Explore and try to stop some of his actions, which was maintained by the court.
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The NTEU case is still being considered in the federal court of appeals, and the judge is considering to what extent the court can direct the Trump administration to operate the CFPB.
Other situations include Appear at the same time. On June 5, the government ethics group of Washington’s Responsible and Ethical Citizens (Crews) announced that the agency is suing the agency for “failing to publish records and failing to approve requests for expedited processing in its agency for the relevant Government Efficiency (DOGE) activities.”
Given that billions of dollars and thousands of staff “all of this without Congress mandate are very little with transparency, staff feel the need for disclosure is necessary.”
Amid these concerns, CFPB critics continue Front. Republican Congressman Byron Donalds called it a “rogue institution” on the June 2 Fox News program.
The Consumer Financial Protection Agency (Blancheman of Elizabeth Warren) acted as an unelected regulator and had blank checks “even operating outside of Congress’s terms of reference.” @byrondonalds.
A beautiful bill will eventually control the out-of-control CFPB. pic.twitter.com/kdogvo8uh5
– Quick Response 47 (@RapidResponse47) June 2, 2025
On June 10, Congressman Dan Meuser Meet A member of the Consumer Bankers Association of Retail Banking Trade Association discussed the reform of the CFPB that “ensures that financial regulations do not stifle innovation or access to capital.”
When the crypto giant cheered for the CFPB crash, the people left behind were users they claimed to serve, now locked in their accounts, ignored by the supported team, without a clear path to pursuing.
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