Consumer Protection Gaps

Consumer protection gaps are the areas where existing legal frameworks fail to provide safety for users of new financial technologies. Because cryptocurrency and derivatives protocols are often novel, they do not fit neatly into existing definitions of banking, securities, or commodities.

This leads to situations where users are not entitled to deposit insurance, disclosures, or fiduciary duties from the platforms they use. These gaps are often exploited by bad actors and result in significant losses for unsuspecting users.

Bridging these gaps is a major focus for regulators worldwide, but progress is slow due to the complexity of the underlying technology. Until these gaps are filled, users must operate with the assumption that they are their own bank and their own protector.