The Inspector General's Office (OIG) of the Federal Deposit Insurance Corporation (FDIC), the U.S. government's deposit insurer, has released an evaluation report on the corporation's strategy for handling crypto asset risks. In early 2022, the FDIC adopted a "bottom-up" approach to assess crypto risks by understanding the activities of supervised institutions, offering tailored supervisory feedback, and providing industry-wide guidance in collaboration with other agencies.
As of January 2023, 96 institutions expressed interest in or reported their current crypto asset activities to the FDIC. While the report doesn't reveal how many institutions received feedback, some were advised to temporarily suspend crypto-related activities until the FDIC assessed the risks.
The evaluation found that the FDIC had initiated the development of strategies for managing crypto asset risks but had not assessed their significance or potential impact. It hadn't determined if issuing guidance to supervised institutions would be sufficient to address these risks.
The OIG recommended that the FDIC document risk assessments, evaluate their significance, and create risk mitigation strategies, including guidance. Additionally, the process for providing feedback in response to the FDIC's letter was unclear, with no defined timeframe for reviews or completion. The OIG considered these recommendations as not significant and noted the FDIC's concurrence with the recommendations, with corrective actions planned for completion by January 2024.
Inspector generals at U.S. federal agencies ensure transparency and accountability through independent audits, evaluations, and investigations.
