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The top United States agency for consumer financial protection is considering applying the Electronic Fund Transfer Act (EFTA) to crypto, in an attempt to protect consumers from fraudulent crypto transfers. <\/p>\n
Speaking at an Oct. 6 payments conference<\/a> by the Brookings Institution think tank, Consumer Financial Protection Bureau (CFPB) director Rohit Chopra said his agency is looking at applying the EFTA to \u201cprivate digital dollars and other virtual currencies.\u201d<\/p>\n \u201cTo reduce the harms of errors, hacks, and unauthorized transfers, the CFPB is exploring providing additional guidance to market participants to answer their questions regarding the applicability of the Electronic Fund Transfer Act with respect to private digital dollars and other virtual currencies,\u201d Chopra said.<\/p>\n Passed in 1978, EFTA is a federal law that protects consumers when they transfer funds electronically, whether by debit cards, ATMs or bank accounts and aims to limit consumer losses from unauthorized transfers.<\/p>\n The regulations obligate financial institutions to inform consumers of if \u2014 or when \u2014 they are liable for unauthorized transfers<\/a>. Liability disclosures are meant to be communicated before the first electronic transfer happens on a user account.<\/p>\n The move by the agency comes amid an over 150% year-on-year increase<\/a> in crypto-platform hacks and as the first criminal trial of FTX co-founder Sam Bankman-Fried<\/a> enters its second week who is accused of fraudulently accessing and using customer funds.<\/p>\n The exchange also suffered a hack north of $400 million<\/a> in the weeks after its bankruptcy.<\/p>\n