SEC Chairman Gary Gensler Shifts Regulatory Spotlight from Crypto to AI

Balancing the Promise of AI with the Imperative of Market Integrity

1302 views

In a significant move, US Securities and Exchange Commission (SEC) chairman Gary Gensler has pivoted the regulatory focus from the much-debated cryptocurrency sector to the burgeoning world of Artificial Intelligence (AI).

AI: The Technology That “Warrants the Hype”

While Gensler has been consistently vocal about the intricacies of the cryptocurrency realm, he now champions AI as the technology deserving of heightened regulatory attention. His fascination with AI isn’t new; it traces back to 1997, when the world witnessed Russian chess maestro Garry Kasparov’s defeat at the hands of IBM’s supercomputer, Deep Blue. This event sparked Gensler’s interest, leading him to explore AI’s depths during his tenure as an MIT professor.

Deep Learning and Financial Systems: A Double-Edged Sword

Gensler’s academic pursuits in AI culminated in a pivotal 2020 paper, co-authored by him, spotlighting the potential perils of deep learning within financial systems. While AI promises transformative benefits, such as enhanced predictive capabilities for financial entities, Gensler cautions against the risks. He warns, “Mass automation can have cascading implications for trillions of dollars in assets that trade on markets overseen by the SEC.”

The Challenge of Accountability in an Automated World

A primary concern for Gensler is the potential obfuscation of responsibility in an AI-driven financial landscape. The synchronized use of AI models across major trading entities could amplify market volatility, potentially outpacing the current regulatory safeguards.

A Proactive Regulatory Framework for AI

In response to these challenges, Gensler has proposed a pioneering regulatory framework tailored for AI in finance. This framework mandates trading entities and financial managers to meticulously assess their AI and predictive data applications, especially when potential conflicts arise between client interests and organizational profits.

Cryptocurrency: Still Under the SEC’s Radar

Gensler’s renewed focus on AI doesn’t signify a relaxation in the SEC’s stance on cryptocurrencies. Under his leadership, the SEC has initiated legal actions against prominent crypto entities like Ripple, Binance, and Coinbase. These ongoing litigations underscore the SEC’s unwavering commitment to curbing malpractices within the crypto sector.

Robert Lee

John Cunningham, serving as a Senior Contributor at Insider Los Angeles, has established himself as a pivotal voice in contemporary journalism. His insightful writing and in-depth analysis of socio-political issues have not only captivated but also informed a wide array of readers in Los Angeles and beyond.

Previous Story

Meta’s Foray into AI Chatbots: A Blend of Innovation and Controversy

Next Story

OpenAI’s GPTBot: A Leap Forward Amidst Controversies

Latest from AI, WEB3

withemes on instagram

This error message is only visible to WordPress admins

Error: No feed found.

Please go to the Instagram Feed settings page to create a feed.