Two technology organizations have taken legal action against a US consumer watchdog, arguing that its recent efforts to regulate digital payment apps as if they were banks overstepped its authority.
The lawsuit, initiated by TechNet and NetChoice on January 16, targets a December 2024 rule issued by the Consumer Financial Protection Bureau (CFPB), which expands its oversight to include widely used payment platforms like Apple Pay, PayPal, Venmo, and Google Wallet.
The new rule allows the CFPB to monitor compliance with privacy and fraud laws through regular examinations of these platforms. However, it does not include crypto wallets or decentralized payment systems.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
Is Cryptocurrency a Good Investment? (5 PROS & CONS!)
The CFPB argues that this step is necessary to protect personal data, combat fraud, and prevent sudden account closures.
The plaintiffs claim that these companies are already subject to strict state regulations, which makes additional federal oversight unnecessary.
They argue that the CFPB has not identified any regulatory gaps to justify its new rule and describe the decision as “arbitrary and capricious”. The lawsuit seeks to have the rule declared unlawful and beyond the agency’s authority.
Critics, including NetChoice, say the rule imposes unnecessary barriers on businesses and stifles innovation. They argue that the CFPB’s actions could lead to higher costs and fewer options for consumers.
Meanwhile, a US law firm called Burwick Law plans a lawsuit against Pump.fun, a Solana
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
