CFPB likely to step back from crypto regulation — Attorney
The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.
“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.
State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.
Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.
However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.
Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report
Trump administration targets CFPB in efficiency push
The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.
Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.
Source: Russell Vought
Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.
Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.
In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
The US Labor Department has officially rescinded guidance issued during the Biden administration that limited the inclusion of cryptocurrency in 401(k) retirement plans.
On May 28, the Labor Department revoked a 2022 guidance that had urged fiduciaries to be “extremely cautious” when considering cryptocurrency for 401(k) retirement plans. The move could give asset managers more flexibility to include digital assets in retirement investment options.
The government agency removed the guidance asserting that it represented a departure from the department’s “historically neutral, principled-based approach to fiduciary investment decisions.”
“We’re rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats,” said US Secretary of Labor Lori Chavez-DeRemer.
The Labor Department under Biden criticized the practice of marketing cryptocurrencies to 401(k) participants. At the time, the agency claimed cryptocurrencies posed “significant risks and challenges” to participants’ retirement accounts due to their “speculative and volatile” nature and “valuation concerns,” among other reasons.
The American Banking Association (ABA) criticized the 2022 compliance release, claiming that it did not make the guidance available for public comment and review prior to issuance.
Related: Fidelity introduces retirement accounts with minimal-fee crypto investing
Trump administration shifts crypto landscape
President Trump has pledged to make the United States “the world capital of crypto” during his 2024 campaign.
Under his administration, the Securities and Exchange Commission has scaled back several enforcement actions and investigations involving Web3 companies such as Uniswap, Coinbase, and Kraken, while also engaging in policy discussions on topics like real-world asset tokenization and the regulatory status of certain tokens.
At the same time, some lawmakers have expressed concerns about Trump’s involvement in the crypto space, including calls for greater scrutiny of his associated ventures.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
Bilal Bin Saqib, head of Pakistan’s crypto council, announced on May 28 that the country is moving to establish a strategic Bitcoin reserve.
Speaking at the Bitcoin 2025 conference in Las Vegas, Nevada, Saqib said the government of Pakistan followed the United States’ lead in establishing a Bitcoin strategic reserve and is embracing pro-crypto regulatory policies. The government official told the audience:
“Today is a very historic day. Today, I announce the Pakistani government is setting up its own government-led Bitcoin Strategic Reserve, and we want to thank the United States of America again because we were inspired by them.”
The announcement represents a significant departure from the government of Pakistan’s previous stance on cryptocurrencies, holding that crypto would never be legal in the country.
Pakistan’s shift reflects the broader trend of nation-states adopting pro-crypto policies following the regulatory shift in Washington, DC under the President Donald Trump administration.
Related: Pakistan appoints special assistant to PM on blockchain and crypto
United States Vice President JD Vance took the stage to deliver a keynote address at the Bitcoin 2025 conference in Las Vegas, Nevada, encouraging Bitcoiners to deepen their involvement in politics.
Vance highlighted the strategic and geopolitical importance of Bitcoin, emphasizing that the US should maintain leadership in the crypto industry to remain competitive in the age of digital finance. Vance told the audience:
“What happens in the world of politics, what happens in the world of bureaucracy, will affect even the most transformational and valuable technologies if we do not make the right decisions. The first thing that I would ask you, is to take the momentum of your political involvement in 2024 and carry it forward to 2026 and beyond.”
“Don’t ignore politics because I guarantee you, my friends, politics is not going to ignore this community, not now, and not in the future,” the vice president continued.
Bitcoin continues to gain institutional legitimacy and has been elevated to an asset class with macroeconomic and geopolitical importance. Market analysts and Bitcoin advocates warn that the global race to acquire BTC is underway between sovereign powers.
Related: Crypto czar Sacks says US could possibly ‘acquire more Bitcoin’
Nation-state Bitcoin adoption
Bitcoin maximalists and market analysts argue that high-stakes game theory compels nation-states to adopt BTC due to the downside or opportunity cost of not adopting the scarce digital asset as sovereign competitors do.
This alleged nation-state’s fear of missing out (FOMO) was amplified by US President Donald Trump’s pro-crypto stance, including the creation of a Bitcoin strategic reserve and a crypto advisory council.
The regulatory shift in the United States prompted other governments to indicate a possible policy reset on cryptocurrencies and Bitcoin.
The government of India, for instance, is reconsidering its crypto policies in response to regulatory changes in the US. India’s economic affairs secretary, Ajay Seth, said that digital assets do not care about borders.
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