SEC Chairman Gary Gensler Targets AI Over Market Manipulation
Summary: The US Securities and Exchange Commission (SEC) is cracking down on artificial intelligence (AI) which might disrupt market flow and aims to prevent bad actors from manipulating markets. Is the SEC planning to regulate AI service providers in the same way it regulates crypto ecosystem participants, is a million dollar question.
The United States SEC has seemingly no limits when it comes to enforcement proceedings, and new technologies like artificial intelligence (AI) are now on the SEC’s radar.
Gary Gensler, the chairman of the Securities and Exchange Commission, has lately said that the agency would crack down on artificial intelligence if it interferes with or otherwise alters the natural flow of markets. The Chairman warned this week in a speech to The National Press Club that bad actors may try to use artificial intelligence to manipulate US markets or scare the public.
Gensler pointed out that ‘under the securities laws, fraud is fraud,’ despite the common misconception that certain types of fraud are treated differently.
The SEC Chairman stated:
“Bad actors may seek to use AI to influence our mkts, or spook the public. Make no mistake, under the securities laws, fraud is fraud. @SECGov is focused on identifying & prosecuting any form of fraud that might threaten investors, capital formation, or the mkts more broadly.”
New Sector Post Crypto
OpenAI’s release of ChatGPT, a conversational-style bot, sparked widespread interest and development in the AI industry, which is still in its early stages of development.
ChatGPT’s release demonstrated the boundless potential of AI. Experts have said that despite the apparent constraints discovered, AI will be able to solve seemingly impossible use cases within the next several years.
Whether or not the SEC plans to regulate AI service providers in the same manner it regulates crypto ecosystem participants is unknown at this time. The SEC has had a busy year, suing and settling with Kraken Exchange and pursuing lawsuits against Coinbase and Binance, two of the largest cryptocurrency exchanges.