US Watchdog Pushes FDIC to Regulate Cryptocurrency Risks

The US Government Accountability Office (GAO) has pushed the Federal Deposit Insurance Corporation (FDIC) to take the lead on crypto oversight, citing difficulties in regulating blockchain-based financial products.

According to a June 8 letter to FDIC Chairman Travis Hill, the GAO has placed blockchain technology on its 'High Risk List' due to regulators' struggles to monitor these products and mitigate associated risks.

The GAO recommended that the FDIC collaborate with other federal authorities to address these risks, which have been exacerbated by the lack of a continuous coordination mechanism among regulatory agencies in 2023.

To address this issue, the GAO advised the FDIC to implement a mandatory rotation policy for bank case managers, ensuring that examiners are rotated regularly and do not develop excessive familiarity with individual banks, which can lead to biased oversight.