The Consumer Financial Protection Bureau (CFPB) is expected to take a backseat in crypto regulation as other federal and state agencies increase their involvement, according to attorney Ethan Ostroff of Troutman Pepper Locke.

Ostroff said that the current administration is likely to shift crypto regulatory duties away from the CFPB, citing increased activity from the Securities and Exchange Commission (SEC) and state regulators like New York’s Department of Financial Services (NYDFS) and California’s Department of Financial Protection and Innovation (DFPI). Under the Consumer Financial Protection Act (CFPA), states are legally allowed to assume certain roles typically overseen by the CFPB.

Despite this shift, Ostroff emphasized that the CFPB won't be dismantled altogether. Its existence and some responsibilities are protected by law, and any significant structural change would require Congressional action.

The Trump administration has made slashing government spending a priority through the Department of Government Efficiency (DOGE), which has targeted the CFPB. Russell Vought, who took over the bureau in February 2025, introduced sweeping funding cuts and scaled back operations almost immediately.

Criticism followed swiftly. Senator Elizabeth Warren, who co-founded the CFPB in 2007, slammed Elon Musk—who is widely viewed as influential in current government policy—for his alleged role in gutting the agency. She accused the administration of attempting to weaken consumer protections and tighten control over the financial system.

Warren also clarified in a February 12 interview with Mother Jones that the Executive Branch cannot legally eliminate the CFPB without Congressional approval, pointing to ongoing legal and institutional protections for the agency’s core functions.