SEC Chairman Gary Gensler’s claim that the SEC is “tech neutral” sparks outrage among the crypto community. Despite Gensler’s promotion of AI, he maintains that enforcement action will persist because “fraud is fraud.” Respondents mocked the SEC chairman, questioning whether he wanted to regulate it and claim that AI is a security.
The chairman of the Securities and Exchange Commission has touted Artificial Intelligence (AI) as the “most transformative technology of our time.” The comments may have merit, but his claims that the SEC is “tech neutral” has caused outrage among the crypto community.
On August 15, SEC Chairman Gary Gensler made a lengthy post on the benefits of AI, comparing the technology to the Internet.
Gensler on AI and Securities Laws
“AI is used in finance for account openings, compliance programs, trading algorithms, sentiment analysis, and more,” Gensler said. He added that, in his opinion, AI will continue to significantly transform science, technology and commerce.
On August 16, Gensler posted on X the following:
“I believe AI is the most transformative tech of our time, on par w/ the internet & mass production of cars. AI is used in finance for acct openings, compliance programs, trading algorithms, sentiment analysis, & more. It’s fueled change with robo-advisers & brokerage apps.”
He further added that:
“I think AI is going to continue significantly transforming science, technology, & commerce. It is important to focus on the challenges of AI. Given that we’re dealing with automation of human intelligence, the gravity of these challenges is real.”
His lyrical escalation continued with a questionable statement that the SEC is “tech neutral.” In addition, he stated that there may be implications for securities laws and his agency.
“We focus on the outcomes, rather than the tool itself. Securities laws, though, may be implicated depending upon how AI tech is used. Within our current authorities, we’re focused on protecting against both the micro & macro challenges of AI.”
He went on to state that the enforcement action will continue even with AI because “fraud is fraud” under securities laws.
The comments regarding that claim of technological neutrality came thick and fast:
“AI is a security,” someone joked, “while others asked if ChatGPT was an unrecorded security.”
“What AI stock do you have, Gary? And why are you giving it to us?” said another respondent.
“Is this seriously a trap for the argument that the SEC is the most appropriate agency to regulate it?” questioned another.
In Other AI and Crypto News
The self-proclaimed “road policeman” has taken matters into their own hands with regard to digital assets and their underlying technology. Cryptocurrencies have yet to be officially classified by Congress, but that hasn’t stopped the SEC from labeling them all as investment securities and contracts.
On August 15, Gensler posted the following on X:
“When communications, product offerings, & pricing can be narrowly targeted, producers are more [sic] able to find each individual’s maximum willingness to pay a price or purchase a product. With such narrowcasting, there is a greater chance to shift consumer welfare to producers.”
Gary Gensler seems to be moving from crypto to AI. Earlier this month, he warned that AI could cause a financial collapse due to opaque decision-making using deep learning. He claimed that companies competing for the best customer returns using algorithms could create instability and volatility in the market.
By Leonardo Pérez
