Crypto Leaders Applaud as New Leadership Shuts Down Operations

Brian Armstrong and Tyler Winklevoss have celebrated the defanging of the Consumer Financial Protection Bureau (CFPB) following recent actions taken by the agency’s new leadership.

Coinbase has reportedly been the subject of more CFPB complaints than any other exchange.

CFPB Chief Orders Shutdown

The agency’s newly appointed chief, Russell Vought, selected by President Donald Trump, has ordered the closure of its headquarters and directed staff to stop all supervisory efforts.

Winklevoss, CEO of Gemini, responded to the development on X by stating, “CFPB Unplugged,” and sharing an image of a 404 error page from the organization’s website.

Coinbase CEO Armstrong referred to the move as a “100% the right call.” He criticized the CFPB, saying it is unconstitutional, and argued that even if it were not, it should be eliminated because fraud prosecution falls under the Department of Justice and other financial regulators. He further accused the watchdog of being an activist organization that had caused significant harm to the country.

Vought took on the role of acting director of the agency on Friday. Reports indicate that on Saturday, he issued a notice to staff instructing them to “cease all supervision and examination activity.”

In a separate post on X, he confirmed that he had informed the Federal Reserve, which funds the CFPB, that the bureau would not be drawing its next round of funding, stating it was not “reasonably necessary” for its operations.

Coinbase Faces More Complaints Than Other Exchanges

The CFPB is responsible for supervising consumer-facing financial institutions to prevent unfair, deceptive, and abusive practices.

The agency reported in July 2023 that its enforcement efforts had returned $17.5 billion to Americans since its founding in response to the 2008 financial crisis. The document also revealed that over four million complaints had been forwarded to companies on behalf of consumers.

Coinbase has been the subject of more such complaints when weighed up against other major exchanges serving U.S. customers. A search of the CFPB’s complaint database shows that over 7,600 mention Coinbase, compared to 487 related to Gemini and 297 linked to Kraken.

The exchange’s customer service has been a longstanding source of criticism. Consumers have reported difficulties reaching support, encountering account restrictions, and facing unresolved complaints about lost funds.

Blockchain detective ZachXBT recently revealed that Coinbase users have lost over $65 million to social engineering scams since December last year.

However, the platform has previously addressed these concerns, explaining that the increase in restricted accounts resulted from a surge in new and reactivated users following recent elections in the U.S. The platform has also assured customers that its fraud prevention systems continue to function as intended.