Digital Currency Transactions and Regulation E – Carol Van Cleef

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    New U.S. regulations to protect consumers who send money to foreign countries take effect this week, but it may be too early to say if the Consumer Financial Protection Bureau’s (CFPB) amendments to Regulation E will extend to digital-currencies transactions. It appears the CFPB is “still in the process of understanding how digital currencies work,” DC Partner Carol Van Cleef told Reuters (subscription required) in an October 28, 2013 article. “They are aware that these systems exist and are being used increasingly as value transfer systems, but I think it's fair to say that Regulation E was not drafted with (virtual currencies) in mind,” she added. “There are any number of aspects of Regulation E that would have to be adapted to take into account some of the more unique aspects of these systems.” “The irrevocability aspect of the virtual currencies present unique challenges under the regulation because it anticipates that there is some period of time for errors to be resolved. And when you have a transaction that is settled instantly, it is a challenge to build in a process which would allow someone to go back and challenge that transaction at a later date.”

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