SEC Chairman Gary Gensler Worried About Artificial Intelligence (AI)-Crackdown Ahead?
The United States Securities and Exchange Commission (SEC) Chairman Gary Gensler is cracking down on Artificial intelligence (AI) next The post SEC Chairman Gary Gensler Worried About Artificial Intelligence (AI)-Crackdown Ahead? appeared first on CoinChapter.
Key Takeaways:
- SEC Chair Gary Gensler has warned about the threat of AI to the financial markets
- According to him, bad actors can use the technology to deceive the public
- He warned that the SEC will crack down on any fraud coming as a result of AI misuse
YEREVAN (CoinChapter.com) — The United States Securities and Exchange Commission (SEC) Chairman Gary Gensler is going after Artificial intelligence (AI) next. Having rocked the boat enough for the cryptocurrency industry, he has now raised significant concerns about the potential risks posed by AI on financial markets.
In a recent address at the National Press Club in Washington, the SEC Chief announced there was an urgent need for regulatory measures to address the heightened financial fragility that AI could introduce to the global economy.
Gensler further called on AI firms “to ensure that material disclosures are accurate and don’t deceive investors”. Failing to do so, according to him, will invite consequences from the SEC.
“Since antiquity, bad actors have found new ways to deceive the public. With AI, fraudsters have a new tool to exploit…to influence elections, the capital markets, or spook the public… Make no mistake, though, under the securities laws, fraud is fraud. The SEC is focused on identifying and prosecuting any form of fraud that might threaten investors, capital formation, or the markets more broadly,”
Gensler said.
The Securities and Exchange Commission Chairman further underscored the risk of conflicts of interest arising in the financial sector when advisers or brokers prioritize their interests over those of their investors.
Gensler drew attention to the possibility of AI being manipulated to favor intermediaries, resulting in adverse consequences for investors.
“That’s why I’ve asked SEC staff to make recommendations for rule proposals for the Commission’s consideration regarding how best to address such potential conflicts across the range of investor interactions,”
he added.
SEC Chief Gary Gensler may rely on AI for enforcement
Despite his criticisms, Gary Gensler is not against Artificial Intelligence entirely. During his speech, he expressed his firm belief in the transformative power of AI, equating its impact to that of the internet and the mass production of automobiles.
According to him, technology can greatly benefit all walks of life if used correctly.
“AI opens up tremendous opportunities for humanity, from healthcare to science to finance. As machines take on pattern recognition, particularly when done at scale, this can create great efficiencies across the economy. In finance, there are potential benefits of greater financial inclusion and enhanced user experience,”
Gensler remarked.
The SEC chair is notorious for his stringent regulatory approach and overseeing a “crypto crackdown” in the past year. However, he couldn’t stop himself from acknowledging, that even his agency could benefit from AI.
“While recognizing the challenges, we at the SEC also could benefit from staff making greater use of AI in their market surveillance, disclosure review, exams, enforcement, and economic analysis,”
he acknowledged.
The cryptocurrency industry is already reeling under Gensler’s crackdown. Will the AI companies start feeling the heat too? Time will tell.
The post SEC Chairman Gary Gensler Worried About Artificial Intelligence (AI)-Crackdown Ahead? appeared first on CoinChapter.
