The U.S. Government Accountability Office (GAO) has urged the Federal Deposit Insurance Corporation (FDIC) to coordinate more closely with other federal regulators on blockchain risks. According to the GAO's June 8 letter to FDIC Chairman Travis Hill, regulators still lack a standing process for coordinated oversight of blockchain financial risks. The watchdog made this recommendation public on June 15, emphasizing that such a process would help agencies identify risks and respond faster to emerging threats in the cryptocurrency sector. The GAO specifically references recommendations first made in May 2023, highlighting that blockchain technology remains on the GAO High Risk List as federal agencies lack mechanisms to collectively identify and respond to threats posed by blockchain-based financial products. As reported by PANews on June 16th, citing Cointelegraph, the GAO stated that blockchain technology has been placed on its 'high-risk list' and believes regulators are facing difficulties in overseeing blockchain-based financial products and their potential risks to the U.S. market.
A leading U.S. banking industry group has intensified criticism of the CLARITY Act's approach to anti-money laundering compliance, with the Bank Policy Institute (BPI) calling the legislation 'illicit finance-friendly' in a policy update published on June 19. The BPI argues that the proposed crypto market structure bill creates a 'lighter-touch AML regime' by applying anti-money laundering obligations only to certain digital asset brokers, dealers, and exchanges, while leaving other parts of the crypto ecosystem outside the framework. According to the BPI, the bill leaves several areas of the digital asset ecosystem outside traditional anti-money laundering requirements, including decentralized finance providers, unhosted wallets, and certain digital asset service providers that would remain beyond the scope of Bank Secrecy Act obligations under the current framework. The organization warned that the proposal could make parts of the crypto ecosystem more attractive to illicit actors seeking to avoid law enforcement scrutiny, and noted that the legislation does not provide clear authority for the Treasury Department to sanction or regulate mixers, tumblers, and other blockchain-based tools commonly associated with money laundering concerns.
The recommendation arrives as the FDIC's crypto role grows under the GENIUS Act. As reported by crypto.news in April, the FDIC proposed rules for stablecoin issuers operating through the banking system, covering reserves, redemption, capital, risk management, and custody standards. Under this framework, reserve deposits backing stablecoins may qualify for deposit insurance if they sit inside insured banks, while stablecoin holders would not receive federal deposit protection. This regulatory framework keeps the FDIC at the center of debates over how bank rules should apply to tokenized payment products. Under the GENIUS Act passed last year, the FDIC is the main regulator for stablecoin issuers that are subsidiaries of the banks it supervises, while Senate lawmakers are currently considering separate legislation for broader federal crypto market oversight.
The GAO also urged the FDIC to strengthen bank supervision following the 2023 bank failures that raised questions about regulatory response times. According to the GAO's assessment, the 2023 failures of Silicon Valley Bank, Signature Bank, and Silvergate Bank highlighted concerns about whether regulators acted quickly enough when institutions showed weak liquidity and risk management. The watchdog found in 2023 that financial regulators lacked an ongoing coordination mechanism for addressing blockchain risks, even as blockchain-related financial products and services have grown substantially. The GAO recommends the FDIC adopt case manager rotation for banks, stating that the agency did not require periodic rotation, which could weaken independence and affect supervision outcomes. All three banks collapsed within less than a week in March 2023 amid fallout from the FTX bankruptcy, which sent crypto markets tumbling.
The GAO letter comes as Congress and federal agencies continue work on comprehensive crypto rules, with the Senate Banking Committee having advanced the CLARITY Act in a 15 to 9 vote in May. The FDIC has also changed its approach to bank crypto activity, stating in 2025 that FDIC-supervised banks could engage in permitted crypto-related work without prior agency approval if they manage the risks effectively. The BPI's criticism of the CLARITY Act reflects broader debates between traditional financial institutions and parts of the crypto industry over compliance obligations for decentralized networks. The banking group has urged Congress to expand compliance requirements and grant Treasury broader authority over mixers and similar services, while also recommending an 'economic benefit' test for decentralized finance to ensure entities that profit from DeFi protocols are not exempt from financial institution obligations simply because services operate through decentralized infrastructure.
