The world of crypto, just like the world of finance, in general, is rather complicated when it comes to regulations of both public and private entities. After all, one of the biggest hurdles with getting mainstream adoption for cryptocurrency has been getting adequate regulation put in place that benefits the industry but still takes into account its complexity as well as the expanse of its use. One of the examples of these complexities can be seen in the fact that many of the existing financial laws cannot be applied to cryptocurrency and this is an argument that has been put forward to regulatory bodies repeatedly. 

According to a December 11, 2019 filing, PayPal is suing the Consumer Financial Protection Bureau for requiring them to make certain disclosures about their fees that are misleading.

See You in Court 

As part of the arguments in the lawsuit, PayPal states that the bureau is failing to recognize the critical differences between digital wallets and prepaid products such as debit cards. The suit states that the bureau has required PayPal to regulate digital wallets and prepaid products in the same way which led to a grossly unfavorable situation.

This situation is due to a rule called “Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) Rule.” which requires PayPal to misrepresent the fees that they do not charge as well as misrepresents with these are actually charged to customers. This room was first implemented in April 2019.

An example of this fee misrepresentation is that PayPal would be required to disclose its highest possible fees at the worst possible situation, most of which do not occur.

“The Rule mandates that customers be given — and actually view — ‘short form’ fee disclosures. The requirements for this short form disclosure are extremely prescriptive and rigid. Certain fee categories must be placed in specified positions and presented in certain font sizes […] The Rule further prohibits PayPal from including explanatory phrases within the disclosure box to describe the nature of these fee categories,” official documents state.

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