Consensys has expressed strong opposition to a proposed rule from the Consumer Financial Protection Bureau (CFPB) that aims to regulate unhosted crypto wallets like MetaMask. This rule, introduced in January, would hold developers accountable for fraudulent transactions in decentralized wallets, aligning them with traditional financial regulations under the Electronic Funds Transfer Act (EFTA). Consensys criticized the rule as a significant deviation from current legal standards, claiming it would impose detrimental conditions on blockchain developers and users. Bill Hughes, Senior Counsel at Consensys, described the proposed regulation as bad policy and highlighted potential legal conflicts with the Administrative Procedure Act. The firm anticipates that the CFPB will withdraw or revise the proposal, particularly given the leadership changes in the Biden administration. Consensys urged the CFPB to abandon the interpretive rule or amend it to exclude the crypto industry altogether. The letter emphasizes the destructive impact this regulation could have on U.S. blockchain developers, indicating that there will be further collaboration with industry bodies such as the Blockchain Association to address these concerns.

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