GAO to CFPB: Take the Lead on Bitcoin

July 1, 2014

GAO to CFPB: Take the Lead on Bitcoin A congressional watchdog is calling on the federal government to take a more active role in regulating Bitcoin and other digital currencies. Last month, the Government Accountability Office (GAO) circulated a confidential report calling on the Consumer Financial Protection Bureau to expand its oversight to include Bitcoin. The report, which became public Friday, recommended the CFPB take the lead on coordinating interagency action regarding digital currencies.

In its report to the Senate Committee on Homeland Security and Governmental Affairs, the GAO said while “virtual currency systems offer some benefits, they also pose risks.” The report noted well-publicized Bitcoin hiccups—including the Mt. Gox scandal —and said federal agencies have focused mainly on the potential money-laundering implications of Bitcoin while mostly ignoring consumer-protection issues.

“Therefore, interagency efforts related to virtual currencies may not be consistent with key practices that can benefit interagency collaboration, such as including all relevant participants to ensure they contribute to the outcomes of the effort. As a result, future interagency efforts may not be in a position to address consumer risks associated with virtual currencies in the most timely and effective manner.”