Examining the thoughts of Gary Gensler, the head of the US securities and exchange commission (SEC), one might ponder whether the speculative bubble of cryptocurrencies or the transformative power of artificial intelligence (AI) should take precedence in the regulatory landscape. Intriguingly, Gensler appears to favour focusing on AI due to its transformative potential which he believes “warrants the hype.” This, despite recently expressing concerns that the crypto market is flooded with fraud and deception.
According to Gensler, the merits of diving into crypto regulations can stand by as the spotlight needs to be thrust on AI technology and the significant risks it presents to American citizens. He emphasized the profound changes AI could introduce, including the automation of our daily responsibilities — which, if left unchecked, might bring about “cascading implications” for trillions of dollars in assets within markets under his jurisdiction. These concerns seem well-founded, with AI’s potential to obfuscate responsibility when things go wrong, as he alluded to in a Bloomberg report.
However, it’s not all doom and gloom; AI also presents intriguing opportunities for the financial market. The power of AI to provide investment advice and recommendations could fundamentally alter the finance industry. Gensler has thus advocated for a new regulatory framework for AI that would encourage trading houses and money managers to examine whether their use of AI or predictive data might create conflicts of interest.
Yet, as the crypto landscape increasingly integrates AI tools such as ChatGPT, a note of concern arises. The crypto exchange Bitget disclosed a study suggesting that four out of five crypto traders have had negative experiences with ChatGPT — having received false investment advice or misinformation. Additionally, an open letter signed by AI experts including Sam Altman of OpenAI and Geoffrey Hinton, dubbed the “godfather” of AI, warns that AI technology could pose an existential risk to humanity, resembling nuclear war or pandemics.
In an earnest call for stronger regulation, Altman, CEO of the company behind ChatGPT, expressed concern that AI could introduce significant harm to the world if not properly governed.
As we move towards this uncertain future, it is clear that both cryptocurrencies and AI will play considerable roles, each with their respective risks and opportunities. While Gensler
Source: Cryptonews
