CFPB report warns about cryptocurrencies, warns of financial risks in video games and virtual worlds
The Consumer Financial Protection Bureau is taking note of cryptocurrency-centric gaming with reports warning of scams and reduced consumer protections in video games and virtual worlds.
Cryptocurrencies may be a smaller part of the virtual gaming world realm, but there is growing interest among game creators in bringing virtual items into the real world, the CFPB said. report It was released on Thursday and is titled “Banking in Video Games and Virtual Worlds.” The report primarily focused on virtual gaming in general.
“These crypto-asset virtual worlds are much less popular than virtual gaming worlds like Roblox, Second Life, or Fortnite, but the prevalence of third-party crypto-asset trading platforms allows users to convert their virtual worlds into virtual worlds. Converting native cryptocurrency assets to fiat makes them more porous than the general gaming market,” the agency said. “In particular, some of the largest virtual gaming world publishers have expressed increasing interest in positioning virtual items as crypto assets that can be traded outside of the gaming economy.”
Crypto assets within worlds such as Decentraland and The Sandbox can be traded for dollars on other cryptocurrency platforms, the agency added.
Cryptocurrency and the CFPB
The CFPB has done some research on cryptocurrencies and recently proposed the following rules: “Defining Large Participants in the General Purpose Digital Consumer Payment Applications Market” gives the agency the ability to oversee “large non-bank companies” that offer services such as digital wallets and payment apps, and stipulates that non-bank financial companies have five or more Require us to process your services. We process one million transactions per year, ensuring we follow the same rules as large banks and credit unions.
The 62-page rule mentions cryptocurrencies several times. part critic It argued that the rule “improperly asserts jurisdiction over cryptocurrencies.”
Reports like the one the CFPB published Thursday could be “a precursor to rulemaking,” said Alexander Grieve, head of government affairs at Paradigm. post At X. “that much @CFPB, like all federal agencies, is trying to find regulatory nexus for cryptocurrencies. This may be particularly the case if large participant wallet rules are scaled back.”
game risk
The CFPB said online video games and virtual worlds are increasingly similar to traditional banking, without the protections consumers might expect under federal law.
The agency said it has received consumer complaints about hacking attempts, account takeovers and loss of access to in-game assets. According to the report, consumers say they don’t receive much support from gaming companies in such situations.
“Americans of all ages are converting billions of dollars into currency used on virtual reality and gaming platforms,” said CFPB Director Rohit Chopra. name. “As more banking and payment activity occurs in video games and virtual worlds, the CFPB is looking for ways to protect consumers from fraud and fraud.”
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