In light of the proliferation of blockchain technology and cryptocurrencies, the Government Accountability Office (GAO) has added one new priority recommendation – to help regulate “blockchain-related risks” – to its list of recommendations for the Securities and Exchange Commission (SEC).
The new recommendation from GAO comes as recent volatility, bankruptcies, and crypto fraud have become more prevalent in the finance sector, which could potentially have devasting repercussions for consumers and investors.
“We recommended the SEC and the other federal financial regulators jointly establish or adapt an existing formal coordination mechanism to identify and address blockchain-related risks,” GAO said in an August 1 letter to SEC Chair Gary Gensler.
Once that coordination mechanism was established, “SEC and the other federal financial regulators would be able to collectively identify risks posed by blockchain-related products and services and develop and implement a regulatory response in a timely manner,” GAO said.
The SEC neither agreed nor disagreed with GAO’s blockchain recommendation.
The GAO letter also touches on “several other government-wide high-risk areas” that it says the SEC should work on, including:
- Improving the management of IT acquisitions and operations;
- Improving strategic human capital management;
- Managing federal real property;
- Ensuring the cybersecurity of the nation as a whole; and
- Enhancing the government-wide personnel security clearance process.
“We urge your attention to these government-wide, high-risk issues as they relate to SEC” GAO said.