U.S. agency proposes rule requiring refunds after crypto hacks

The Consumer Financial Protection Bureau has proposed a rule that would require U.S. cryptocurrency companies to reimburse customers who lose funds due to hacks or unauthorized transactions.

The proposal aims to extend consumer protections already in place for traditional bank accounts to digital wallets used for cryptocurrencies, according to to Financial Times reports.

The CFPB rule aims to expand the reach of the Electronic Fund Transfer Act to cover digital assets such as stable coins – cryptographic tokens designed to maintain a stable value – and other fungible tokens used for payments.

If passed, the expansion would redefine “funds” to include assets that act like money or are used to pay for goods and services.

Cryptocurrency accounts, often called wallets, allow users to store digital currencies and make transactions. However, unlike traditional bank accounts, these wallets are not universally protected against losses resulting from hacking or fraud.

The CFPB’s proposal would change that, requiring service providers to compensate customers for stolen funds.

Cryptocurrency hacking

The proposal comes amid a surge in cryptocurrency hacking incidents. Blockchain analytics firm Chainalysis reported 303 crypto hacks in 2024, resulting in $2.2 billion in stolen funds.

North Korean groups were responsible for more than $1.6 billion of these losses, double the theft from the previous year.

The CFPB’s proposal marks one of the Biden administration’s latest crypto-related initiatives. However, its future remains uncertain because arrival The Trump administration, which has shown strong support for the crypto industry, is preparing to take office.

Several Trump advisers, including Elon Musk and Vivek Ramaswamy, have publicly criticized the CFPB, calling for it to be reduced or eliminated.

Public comment on the CFPB’s proposal is open until March 31, after which the bureau will decide whether to issue a final rule.