Decentraland

The Sandbox

April

The United States Consumer Financial Protection Bureau (CFPB) has targeted crypto-centric gaming in a recent report, cautioning against scams and low consumer safeguards in video games and virtual realms.
In its “Banking in video games and virtual worlds” report&nbsp;<a href="https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-video-games/#1" target="_blank" rel="noopener nofollow">released</a> on Thursday, April 4, the consumer protection agency highlights the rising interest among gaming creators in bridging virtual items to reality.
Despite still trailing mainstream gaming platforms like Roblox or Fortnite, the agency highlighted the growth of crypto assets in virtual worlds. Third-party trading platforms enable users to convert digital assets into fiat currency. The report states:
<blockquote data-ct-non-breakable="true">
 “Notably, some of the largest virtual gaming world publishers have expressed growing interest in positioning their virtual items as crypto-assets that have the ability to be traded outside of the game’s economy.”
</blockquote>
The report said that crypto assets in virtual environments like Decentraland and The Sandbox could be exchanged for fiat currency on other cryptocurrency platforms.
Alexander Grieve, government affairs lead at Paradigm, said&nbsp;that reports like the one published by the CFPB could signal upcoming regulatory actions. He suggested that the CFPB, like many federal agencies, is seeking its regulatory role in the cryptosphere, with this report potentially serving as one avenue.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-04/16196a77-9925-43c3-b05f-afba9376ea29.png" alt="" title="">
 <figcaption style="text-align: center;">
 Source:&nbsp;<a href="https://twitter.com/AlexanderGrieve/status/1776214028370530462" target="_blank" rel="noopener nofollow">Alexander Grieve</a>
 </figcaption>
</figure>
The CFPB report states that online video games and virtual worlds are becoming akin to traditional banking but lack federal protections. The agency received complaints regarding hacking attempts, account theft and assets lost within games, with consumers expressing dissatisfaction over the lack of support from gaming companies.
Related: <a href="https://cointelegraph.com/news/french-hill-lead-house-financial-services-committee">Crypto-focused lawmaker wants to lead House Financial Services Committee in 2025</a>
CFPB Director Rohit Chopra <a href="https://www.consumerfinance.gov/about-us/newsroom/statement-of-cfpb-director-rohit-chopra-on-risks-to-consumers-in-video-gaming-marketplaces/" target="_blank" rel="noopener nofollow">highlighted</a> the increasing trend of Americans converting billions of dollars into digital currencies for gaming. With banking and payments shifting to virtual realms, the CFPB said it aims to safeguard consumers from fraud and scams.
The CFPB has shifted its focus toward cryptocurrencies, introducing a proposed rule titled “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.” This rule <a href="https://cointelegraph.com/news/us-cfpb-proposes-supervising-digital-app-providers-including-crypto-wallets">grants the agency oversight over “larger nonbank firms</a>” providing digital wallet and payment app services. 
It mandates nonbank financial entities processing over five million transactions annually to adhere to regulations akin to those imposed on major banks and credit unions. Although the 62-page rule references cryptocurrency sparingly, critics&nbsp;<a href="https://cointelegraph.com/news/us-lawmakers-proposed-cfpb-rule-crypto">contend it “asserts authority over cryptocurrency</a>” inappropriately.
Magazine: <a href="https://cointelegraph.com/magazine/crypto-regulations-us-warren-bitcoin/">Lawmakers’ fear and doubt drives proposed crypto regulations in US</a>

US consumer agency flags risks in virtual crypto economies

Cointelegraph

Other articles published on Apr 6, 2024

Anthropic AI Unveils Game-Changing ‘Tool Use’ Beta for Claude, Empowering Real-Time Data Integration

BlockDAG Facilitates Finance Industry with a Special Payment Card Integration: Insights into SNX ...

Kaspa Reward Reduction Signals End of Downtrend, Analyst Points to KAS July Price Target

Ripple vs. SEC: Examining the Controversial $1.95 Billion Remedies Request

Shiba Inu Community Boosts Coin Burn Rate to Reduce Supply

XRP's Potential Surge: Analyst Unevil A Generational Wealth Opportunity

Join our free newsletter for daily crypto updates!