On November 10, 2022, the Consumer Financial Protection Bureau (“CFPB”) announced the publication of a “complaint bulletin” analyzing consumer complaints relating to crypto assets. The CFPB periodically releases a “complaint bulletin” to summarize key trends among the financial products and services complaints it receives. By devoting an entire bulletin to crypto assets, the CFPB may be foreshadowing greater scrutiny of the asset class and increased enforcement activity in the space.
The November 2022 complaint bulletin analyzes the 8,300 complaints the CFPB has received since October 2018 that relate to crypto assets. The CFPB’s overarching takeaway is that consumer issues are rising and may pose a serious problem in crypto asset markets. Consumer complaints have increased steadily as crypto assets have grown in popularity, with the most common complaints relating broadly to fraud, theft, hacks, and scams. The CFPB’s bulletin breaks consumer issues into discrete categories, with examples and advice to consumers on how to mitigate risk.
The most common customer complaint—and the one the CFPB is most concerned about—is bad actor misconduct. The CFPB reported that crypto asset platforms and wallets are unusually susceptible to fraud, theft, hacks, and scams. Commonly reported examples of fraud and theft include:
- Technically sophisticated thefts through crypto asset platforms by gaining access to a consumer’s two-factor authentication;
- Phishing and social engineering to gain access to personal information;
- Scams that use crypto assets as a premise, such as “investment scams” where the perpetrator impersonates a business and asks to be paid in crypto assets—these are most commonly advertised on social media; and
- Romance scams whereby the perpetrator forms a personal connection with the victim before asking for crypto assets.
Aside from bad actor misconduct, the CFPB outlined a number of other recurring customer issues in the crypto asset space:
- Transaction issues when buying and selling crypto assets, or when attempting to withdraw U.S. dollars from crypto platforms;
- Hidden, undisclosed, or unexpected fees;
- Lack of customer service;
- Crypto asset platforms freezing account withdrawals, or filing for bankruptcy; and
- Crypto asset credit and debit cards, which are often rejected.