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ARTICLE · 20 DECEMBER 2022

CFPB And State Regulators Hone In On Interest-Bearing Crypto Accounts

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On November 22, the CFPB denied a crypto lending institution's petition for an order modifying a pending civil investigative demand ("CID") that the Bureau issued to the institution in December of 2021.

United StatesTechnology
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Matt Benz
Matt Benz
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On November 22, the CFPB denied a crypto lending institution's petition for an order modifying a pending civil investigative demand ("CID") that the Bureau issued to the institution in December of 2021. The CFPB issued the CID as part of an investigation into the institution's advertisement of certain product offerings, including lines of credit and its "Earn Interest Product" ("EIP").

In its petition, the crypto lending institution argued that the CID should be modified to exclude its EIP because the CFPB lacks authority over that product. The institution cited in support of its petition a recent SEC order determining that interest-bearing crypto lending products are securities, meaning they are beyond the Bureau's statutory jurisdiction. In denying the institution's petition, CFPB Director Rohit Chopra noted that the institution's simultaneous contention that its EIP is not a security subject to SEC oversight was fatal to the institution's argument.

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