New Tech Safety Bill Puts AI to Work for the CPSC, Studies Blockchain for Fraud Prevention

The Consumer Safety Technology Act is basically a massive upgrade for how the government plans to keep you safe from bad products and online scams. Instead of just adding new rules, this bill focuses on giving federal agencies cutting-edge tools—namely, Artificial Intelligence (AI) and blockchain—to do their jobs better.

The CPSC Gets a Robot Assistant

Title I of the bill, the “AI for Consumer Product Safety Act,” mandates that the Consumer Product Safety Commission (CPSC) launch a pilot program within a year to test out AI. Think of it as giving the CPSC a super-smart intern that can crunch data faster than any human. The CPSC must use this AI for at least one of four key tasks (SEC. 102):

1. Tracking injury patterns: Spotting trends in consumer product injuries before they become widespread problems.
2. Identifying hazards: Flagging potential dangers in products before they even hit the market.
3. Monitoring recalls: Making sure recalled products aren’t still sitting on store shelves or being sold online.
4. Blocking bad imports: Using AI to decide which imported goods should be stopped at the border because they look unsafe, referencing Section 17(a) of the Consumer Product Safety Act.

This is a big deal for anyone who buys anything. If the AI works, it means fewer dangerous products—from faulty baby gear to exploding electronics—will make it into your home. However, the use of AI to block imports is a provision to watch; if the AI models are flawed or biased, it could cause massive and unfair delays for legitimate businesses trying to ship goods into the U.S. The CPSC has to consult with tech experts and industry groups, and then report its findings publicly to Congress, which is a good check on the system.

Blockchain and the Fight Against Fraud

Title II, the “Blockchain Innovation Act,” shifts focus from physical products to digital security. It requires the Secretary of Commerce, working with the Federal Trade Commission (FTC), to conduct a study within one year on how blockchain technology can be used to protect consumers from fraud and unfair business practices (SEC. 202).

If you’ve ever had your identity stolen or been hit with a scam, you know how much time and money that costs. Blockchain, the secure digital ledger technology, could potentially make it harder for bad actors to operate. The study needs to look at current trends, how government and private companies can collaborate, and what risks come with using this technology. This isn't about regulating crypto; it’s about exploring whether the underlying tech can be a shield against the kind of online scams the FTC usually chases down under Section 5 of the FTC Act. The public gets to weigh in, and the full report must be posted online.

Putting the FTC on Notice for Token Scams

Finally, Title III, the “Digital Taxonomy Act,” addresses the wild west of digital tokens—think NFTs, certain cryptos, or other digital assets. This section acknowledges that while these technologies drive innovation, they also attract scams. It requires the FTC to produce a detailed report within a year on its efforts to combat unfair or deceptive practices in token transactions (SEC. 303).

Essentially, Congress is telling the FTC: “Show us what you’ve been doing about token scams, and tell us what new laws you need to better protect consumers.” This report must detail past enforcement actions and include recommendations for new legislation. For anyone who has dipped a toe into the digital asset market, this is critical. It forces the primary consumer protection agency to focus its attention and resources on an area where consumer losses are often devastating, paving the way for clearer rules in the future.