CFPB Releases Analysis of Consumer Complaints Related to Crypto-Assets | So Good News
Showing the growth of consumer complaints related to crypto-assets, on November 10Th, 2022, the Consumer Financial Protection Bureau (“CFPB”) released a Complaint Bulletin, which analyzed more than 8,300 complaints the CFPB received related to crypto-assets. The CFPB reviewed complaints submitted to them between October 2018 and September 2022, but noted that the majority of complaints they received were filed in the past two years, with most complaints filed by consumers in California and Florida.
About 40% of crypto-related complaints reviewed by the CFPB involved fraud, theft, hacks, or fraud. However, this number has been increasing since 2021, with 63% of complaints made in September 2022 related to fraud. Some of the scams identified were fraudulent and sophisticated attempts to gain access to personal and account information. The CFPB highlighted several types of fraud it saw in its audit, including fraud related to technology such as “SIM-Swapping,” where SMS messages are intercepted to use two-factor authentication used on crypto-asset platforms. .
Other traditional tactics were also featured, including “love scams,” where scammers play on the victim’s mind in order to get money. These scams included the so-called “pig killing” scam, where fraudsters “present themselves as financially successful and spend time gaining the trust and confidence of the victim, educating the victim by setting up crypto-asset accounts.” The CFPB alleges that the crypto-asset romance scam cost the average person $10,000. Although fraudulent transactions have been caught quickly, crypto-asset companies have said they cannot reverse these transactions, suggesting the immutability of most blockchain transactions.
The second biggest issue related to crypto-related complaints was public issues. The CFPB points out that “many consumers find it difficult to make transactions, especially during the increase in crypto-asset prices. These consumers often complain that they cannot complete the transaction immediately, which causes them to lose or fail to make a profit. Some of the additional reasons related to the activities that the CFPB it says that it is crypto-assets “forking,” where crypto-assets are split into separate blockchains that make them inconsistent when trying to convert assets, and crypto-asset limits on a particular platform. [the asset] may be changed by the platform (so that the buyer can no longer act on the product). Some buyers have gotten lost trying to transfer unrelated assets between different wallets or crypto-asset platforms. ”
In response to these complaints, the CFPB issued a list of steps that consumers can take to protect themselves, including being alert to signs of fraud, reporting any claims to the FDIC insurance, knowing the best way to contact the platform in the event of an emergency. story, I know the owners of the crypto-asset platforms that are used. Except in providing these procedures, the CFPB has not indicated whether it has conducted investigations or other activities in response to complaints.