US SEC Chair Gary Gensler Sidelines Cryptos and Says AI “Warrants The Hype”
The head of the US securities and exchange commission (SEC) Gary Gensler thinks that the “transformative” power of artificial intelligence (AI) makes it a regulatory priority than cryptocurrencies.
Shifting his focus from cryptocurrencies, Gensler says AI “warrants the hype” as he regards the technology as “the most transformative of this generation.”
The regulator who recently stressed that the crypto market is "rife with fraud, rife with hucksters,” noted that cryptos can wait and AI is notably more essential to focus on as the tech presents significant risks to US residents.
“This is the most transformative technology of this generation. There’s a ‘there’ there—we can get to crypto later. We’re taking so much of what we humans do on a daily basis and automating it.”
Gensler warned of several significant risks associated with the AI boom such as mass automation, which can have “cascading implications” of trillions of dollars in assets that trade on markets monitored by the regulator.
As reported by Bloomberg, Gensler noted that this nascent technology, if left unchecked, can be used to obscure responsibility when things go awry. However, the regulator praised AI’s ability to recommend and advise on investments, which would fundamentally change finance.
Gensler proposed the first regulatory framework for AI in July, which called trading houses and money managers to determine whether their use of AI or predictive data poses a conflict of interest, especially concerning serving clients versus company profits.
AI Could Pose More Risks Than Crypto – Here’s Why
In recent times, the crypto landscape has seen a surge in the integration of AI tools such as ChatGPT, which though exciting, has its own drawbacks.
Crypto exchange Bitget came with a survey which found that in 80% of cases, crypto traders have had negative experience with ChatGPT such as false investment advice, and misinformation of facts.
Furthermore, according to an open letter signed by AI experts including Sam Altman of OpenAI and Geoffrey Hinton, known as the "godfather" of AI, the technology could pose a “risk of extinction” to humanity on a scale akin to nuclear war or pandemics.
Sam Altman, the CEO of the company behind ChatGPT, expressed concern that AI could “go quite wrong.” Speaking at a Senate committee hearing in May, he said that the tech could "cause significant harm to the world" unless it is properly regulated.
“If this technology goes wrong, it can go quite wrong. We want to be vocal about that. We want to work with the government to prevent that happening. But we have to be clear-eyed about it.”