SEC Chairman Gary Gensler Shifts Focus from Cryptocurrency to artificial intelligence (ai)
SEC chairman, Gary Gensler, has recently announced a shift in regulatory focus from cryptocurrencies to artificial intelligence (ai). Previously vocal about the risks and challenges within the cryptocurrency industry, Gensler now believes that ai is the technology deserving greater attention.
Gensler’s Interest in artificial intelligence
Gensler’s fascination with ai dates back to 1997, when he witnessed Russian chess grandmaster Garry Kasparov losing to IBM’s supercomputer, Deep Blue. As an MIT professor, Gensler delved deeper into ai research and co-authored a significant study in 2020, emphasizing the risks posed by deep learning within the financial system.
Addressing Risks and Accountability in ai Use
Gensler’s concerns over mass automation using ai in finance have led him to reevaluate regulatory approaches. While ai can significantly benefit financial firms and clients through enhanced predictive capabilities, it also carries risks that need addressing. One concern is the potential for ai to obscure responsibility when things go wrong or increase market volatility and instability.
Proposed Regulatory Framework for ai in Finance
Gensler has taken a proactive step by proposing the first regulatory framework for ai use in finance. This framework requires trading houses and money managers to evaluate their use of ai and predictive data carefully, identifying any conflicts of interest – especially when client interests clash with company profits.
Continued Crackdown on Cryptocurrencies
Despite the regulatory shift, the SEC’s crackdown on cryptocurrency companies for scams and fraudulent activities remains active. Under Gensler’s leadership, legal actions against firms like Ripple, Binance, and Coinbase continue, emphasizing the SEC’s commitment to enforcing regulations.
Balancing Innovation and Market Integrity with ai
Gensler’s emphasis on ai comes at a crucial time as the technology revolutionizes financial processes. Though promising, unchecked growth could lead to unforeseen challenges. Gensler aims to strike a balance between promoting innovation and safeguarding market integrity and investor interests by directing the SEC’s attention towards ai regulation.
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