Thursday, June 26, 2014

U.S. Consumer Financial Protection Bureau is Looking Into Bitcoin

Bitcoin and other digital currencies will get more attention from the U.S. Consumer Financial Protection Bureau after prodding from a congressional watchdog.

The Government Accountability Office, the investigative arm of Congress, wrote in a confidential report last month that the bureau, created by the 2010 Dodd-Frank financial regulatory overhaul, needed to become more active in developing U.S. digital-currency policies. In a written response, the agency agreed.

“We’re looking forward to increasing our involvement in formal working groups as they engage on specific issues relating to consumer protection,” William Wade-Gery, CFPB’s acting assistant director for card and payment markets, wrote in a May 6 letter to the GAO.

While the GAO report didn’t specify the issues that should be addressed by the CFPB, fraud and security have been serious problems for some bitcoin users. For example, an exchange based in Tokyo went bankrupt in February after losing most of its users’ accounts to hackers.

“Thus far, interagency efforts have had a law enforcement focus, reflecting the attractiveness of virtual currencies to those who may want to launder money or purchase black market items,” the GAO said in the report dated May 2014.

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