The Biden administration seeks to make crypto wallet providers responsible for on-chain fraud and errors. The Consumer Financial Protection Bureau introduced a rule treating digital wallets as financial institutions, aiming to enhance consumer protection in digital transactions. Criticism comes from industry leaders who argue it’s unfair to blame providers for user misuse.

The rule faces strong criticism from the crypto industry, with leaders likening it to blaming a manufacturer for misuse of their product. With a pro-crypto Trump administration expected, the rule is likely temporary. This highlights the ongoing tension between regulation and innovation in the digital asset space, signaling potential policy shifts.