US watchdog recommends interagency mechanism to address blockchain risks amid rapid growth in crypto-linked financial products.
The Government Accountability Office urged the FDIC to establish an ongoing coordination mechanism with other financial regulators to identify and mitigate blockchain-related risks. The recommendation follows a 2023 review that found regulators lacked a structured approach as crypto products expanded significantly.
The GAO also highlighted concerns over FDIC’s supervision practices, noting that case managers were not rotated among banks, potentially compromising independence. The watchdog linked lapses to the 2023 collapses of Silicon Valley Bank, Silvergate Bank, and Signature Bank, all with heavy crypto exposure.
Regulators faced scrutiny after the failures, which occurred within days amid the FTX bankruptcy fallout. The GAO’s 2024 findings suggest rotation requirements could improve oversight outcomes in the sector.