US SEC Chairman Current regulatory system lacks the ability to address the risks of AI

US SEC Chairman Current regulatory system lacks ability to address AI risks

Author: Jacob Oliver, CryptoSlate; Translation: Song Xue, LianGuai

According to Bloomberg, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), has downplayed his focus on cryptocurrency and shifted his attention to artificial intelligence, stating that this technology is “worthy of great publicity”.

Gensler has long been facing an industry he claims is rife with cryptocurrency scams and fraud, and now he is focusing on artificial intelligence (AI), which he believes is “the most transformative technology of this generation”. As artificial intelligence begins to automate many human processes in the financial industry, Gensler warns that it could be dangerous if left unchecked.

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Gensler said, “Mass automation could have a cascading effect on the trillions of dollars in assets traded in the markets overseen by the SEC.” He warned that while the predictive capabilities of artificial intelligence can help companies better serve customers, it can also be used to cover up responsibility when things go wrong.

Gensler has a long history in the field of technology, starting from his exploration of artificial intelligence after Russian chess grandmaster Garry Kasparov lost to IBM’s supercomputer Deep Blue in 1997. Later, as a professor at MIT, Gensler immersed himself in the study of artificial intelligence and co-authored a paper in 2020 on the risks that deep learning poses to the financial system.

In July of this year, Gensler proposed the first regulatory framework for artificial intelligence, requiring trading firms and fund managers to assess whether their use of artificial intelligence or predictive data could lead to conflicts of interest, especially between the best interests of clients and company profits.

Gensler’s shift of focus to artificial intelligence does not mean that the SEC is relaxing its control over cryptocurrencies. Several lawsuits involving major cryptocurrency companies such as Ripple, Binance, and Coinbase are still pending, indicating that under Gensler’s leadership, the U.S. Securities and Exchange Commission remains committed to enforcing current actions against cryptocurrency companies.

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