The Consumer Financial Protection Bureau (CFPB) is expected to experience a diminished role in cryptocurrency regulations as various federal entities such as the Securities and Exchange Commission (SEC) and state regulators take on a larger influence in crypto policy, as per Ethan Ostroff, a partner at Troutman Pepper Locke law firm.
“I believe that under the current administration, it is very probable that we will observe a considerable retreat by the CFPB regarding the actions of other regulatory bodies,” Ostroff informed Cointelegraph during a discussion.
The attorney pointed out that state authorities also possess the power under the Consumer Financial Protection Act (CFPA) to undertake some of the supervisory duties of the CFPB, yet he added that specific regulatory functions will remain within the territory of the CFPB due to established legislation.
Ostroff highlighted the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as key regulators to monitor as potential frontrunners of cryptocurrency regulations at the state level. Nevertheless, the attorney clarified that although the CFPB may face a contracting role during the Trump administration, the agency will not be entirely dismantled under the current regime because of “statutorily mandated obligations and requirements” necessitating Congressional action for alterations. Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report The Trump administration aimed at the CFPB as part of a broader effort by the Department of Government Efficiency (DOGE) to cut government spending and decrease the national debt. Russell Vought, the newly appointed head of the CFPB, declared significant funding reductions to the agency and scaled down operations shortly after taking charge at the CFPB in February 2025. Source: Russell Vought Massachusetts Senator Elizabeth Warren denounced Elon Musk for dismantling the CFPB, an agency that she co-founded in 2007. Warren labeled Musk a “bank robber” and asserted that the Trump administration tore down the CFPB to reverse consumer protection laws and gain more control over the financial sector. In a February 12 interview with Mother Jones, the senator emphasized that the Executive Branch does not possess the statutory power to entirely abolish the CFPB, which can solely be done with Congressional consent. Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Trump administration focuses on CFPB in efficiency initiative
