In an August 18 press release, Paxton accused both of presenting themselves as mental health tools without proper qualifications. He argued that artificial intelligence (AI) platforms can give the false impression of offering real therapy.

He said this puts children at risk of relying on chatbots for help instead of licensed professionals. According to his office, the companies created personas that appear as trusted advisers despite lacking medical oversight or credentials.

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Character.AI has millions of user-created personas. One of them, called “Psychologist”, is especially popular with young users. Meta does not promote therapy-specific bots for children, but its general AI assistant and third-party personas can still be used for emotional advice.

Still, Paxton pointed to privacy and data concerns. He said chatbots often promise confidentiality, but their terms of service reveal otherwise. According to him, conversations are stored, tracked, and used to develop algorithms or deliver advertising.

Meta’s privacy policy confirms that it collects prompts, feedback, and other interactions to improve AI. The company also shares some data with third parties, including search engines, to provide more personalized outputs.

Meanwhile, Character.AI’s shows that the company logs details such as demographics, device identifiers, location, browsing history, and app activity. It also tracks users across major platforms like TikTok, YouTube, Reddit, Instagram, and Discord.

Recently, Illinois approved new rules that stop licensed therapists from using AI chatbots to help with mental health treatment. What do the rules include? Read the full story.

A federal judge has approved a motion to suspend the lawsuit filed by a group of state attorneys general and the advocacy group DeFi Education Fund against the U.S. Securities and Exchange Commission (SEC).

The complaint filed in November alleges that the SEC acted beyond its authority in filing enforcement actions against crypto exchanges, arguing that the power the regulator asserts over digital assets belongs to individual states.

“[W]ithout Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions targeting the digital asset industry, premised on the theory that practically all purchases and sales of digital assets are ‘investment contracts.’”

On April 16th, Judge Gregory Van Tatenhove of the Eastern District of Kentucky ordered a 60-day pause on the deadlines and legal proceedings related to the case following the appointment of pro-crypto businessman Paul Atkins as the new SEC chair.

The development comes as the SEC takes a more friendly approach to the digital assets industry. The securities watchdog has already dropped numerous key crypto cases, including those involving the blockchain payments firm Ripple and the crypto exchange Kraken.

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On Monday, Deputy Attorney General (DAG) Blanche released a memo entitled “Prosecutor’s Ending Regulations,” which stated that the U.S. Department of Justice would stop crackdowns on Bitcoin and crypto mixers.

Here is the exact language he used in his notes:

“…The Department of Justice will suspend participation in regulations through prosecutions in this area. Specifically, the department will no longer target crypto exchanges, mixed and tumbling services, and offline wallets due to end-user conduct or unconscious violations of regulations.”

The next day, New York Attorney General (NYAG) James co-authored a letter calling on Congressional leaders to create federal crypto regulations to prevent the use of crypto mixers for illegal purposes.

Here’s what she and her co-authors had to say about the crypto mixer:

“Effective laws must require cryptocurrency platforms to expressly comply with the Anti-Money Laundering Act. To know about customer (“KYC”) regulations and cybersecurity protocols, we must prevent terrorism, hostile regimes and crime financing to prevent the use of cryptocurrencies. USD. ”

Dag Blanche has benefited from the doubts of users of Bitcoin and Crypto mixers, but NY AG James implied that all users of such mixers are criminals, as all users of such mixers call them “money laundering mixers.”

Such language is deeply concerned about hearing from the state’s attorney general (the lawyer) as if to speculate on guilt.

NY AG James has adopted this type of rhetoric, mainly in Bitcoin and crypto since taking on the role of Attorney General in 2018, and has been working on the role of 1. ) She has never allowed human rights and democratic activists to use the mixer to preserve both the privacy and privacy of donors.

So, as Bitcoin privacy becomes more prominent in the political field, you should amplify the type of rhetoric that Dag Blanche uses, and make sure it pushes back dangerous and unjust rhetoric from things like NY AG James.

It is up to us to hear our voices on this issue and to let elected officials know that it is important to us.

The fight is underway for the right to personally transfer value across the Internet. Don’t stay on the sidelines.

This article is a take. The opinions expressed are entirely the authors and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

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