Financial services company PayPal has introduced voluntary Reg-E insurance coverage for crypto consumers, providing up to $50,000 in protection against unauthorized crypto transfers from their accounts. The insurance will only apply to unauthorized transactions and errors, and will help increase PayPal's user base while protecting customers from events such as hacks.

Customers can transfer crypto to external wallets and exchanges, and will be reimbursed for unauthorized purchases or sales of crypto assets from their accounts. PayPal is the first company to promise compensation for losses incurred by unauthorized cryptocurrency transfers, and the insurance is related to electronic funds transfers under Regulation E. This is a significant development in the regulatory framework for protecting cryptocurrency customers, even though the U.S. Consumer Financial Protection Bureau has yet to enforce Reg E for crypto payments.