As part of its Gaming Workstream and partnership with the Blockchain Game Alliance, The Digital Chamber has submitted a formal comment letter to the Consumer Financial Protection Bureau (CFPB) regarding its proposed interpretation of Regulation E as applied to blockchain gaming platforms and self-hosted digital asset wallets. The rule interpretation sought to classify wallets and gaming platforms as financial institutions subject to the Electronic Fund Transfer Act (EFTA) and its corresponding Regulation E compliance requirements. While we commend the CFPB’s commitment to strengthening consumer protection, we explain that applying Regulation E to these technologies is technically infeasible and risks undermining innovation in the blockchain space. 

What You Need to Know:

1. Self-Hosted Wallets and Developers Fall Outside EFTA and Regulation E
   • Self-hosted wallets are not financial accounts, are not controlled by intermediaries, and their developers do not function as financial intermediaries. These wallets simply provide users with tools to access blockchain networks and fall outside the scope of Reg. E. 
2. CFPB Should Align with FinCEN’s 2019 Guidance
   • FinCEN has already determined that self-hosted wallet providers are not money services businesses (MSBs) under the Bank Secrecy Act. We urge the CFPB to adopt a consistent approach. 
3. Blockchain Gaming Platforms Do Not Provide Financial Accounts 
   • Web3 gaming platforms provide profile accounts for gameplay, not for asset custody. Players retain full control of their assets through a “bring your own wallet” model, and transactions occur externally via licensed third-party marketplaces and payment processors—not within the game itself. 
4. Irreversible Blockchain Transactions Preclude EFTA Compliance 
   • Because blockchain transactions are irreversible by design, game publishers cannot reverse, adjust, or cancel them. Applying EFTA’s consumer protections as written would impose impossible obligations. 
5. Blockchain Enhances Consumer Protection 
   • However, blockchain gaming platforms and self-hosted wallets reduce the risk of asset loss and unauthorized transactions, while empowering users with full control over their assets—even if a game is discontinued. 
6. NFTs Are Correctly Excluded from the Definition of “Funds” 
   • We support the CFPB’s conclusion that NFTs are not “funds” under Regulation E, as they function more like collectibles or digital goods rather than mediums of exchange. 

We respectfully urge the CFPB to consider these technical realities and avoid imposing infeasible compliance burdens on blockchain gaming platforms and wallet providers. TDC, the Blockchain Game Alliance, and our respective members stand ready to assist the Bureau in advancing responsible innovation while protecting consumers. 

Read the full comment letter here.