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Is AI the next target for regulation? SEC Chairman Gary Gensler: Some applications of AI may involve securities laws

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Is AI the next target for regulation? SEC Chairman Gary Gensler: Some applications of AI may involve securities laws

Despite filing lawsuits against exchanges such as Kraken, Bittrex, Coinbase, and Binance in the first half of 2023, the U.S. Securities and Exchange Commission (SEC) shows no signs of slowing down. Chairman Gary Gensler has set his sights on the AI applications that have garnered attention this year, suggesting that certain areas may fall under securities laws.

Gary Gensler: AI is the Most Revolutionary Technology

Gensler emphasized at the beginning of his tweet that he believes AI is the most revolutionary technology of our time, with importance equivalent to the widespread adoption of the internet and automobiles. He also mentioned that AI can be applied in the financial sector for account opening, compliance planning, trading algorithms, sentiment analysis, and more.

Furthermore, individuals with malicious intent may attempt to influence election results, capital markets, or cause public panic by using AI to fabricate events.

Regarding causing public panic, Gensler cited Orson Wells' radio program in 1938 as an example. Wells adapted the British science fiction novel "The War of the Worlds" for the radio program, which was presented in a dramatic form with "news bulletins." Due to the realistic description of an alien invasion, listeners mistook it for a real event, leading to nationwide chaos.

"The War of the Worlds" radio drama subsequently became a classic case study of fake news.

Reflecting on recent fake news cases: the media incorrectly reported that "The Big Short protagonist Michael Burry bought $10 million in put options," testing readers' reading comprehension skills.

Gary Gensler: AI Applications may Involve Securities Laws

Gensler stated:

The SEC remains neutral on any technology; we focus on the outcomes rather than the tools themselves. However, the specific applications of AI may involve securities laws. Within our current jurisdiction, we will do our best to address the various challenges posed by AI.

He emphasized the SEC's primary responsibility is to identify and prosecute any threats to investors or extensive market fraud.

The crypto community also left interesting responses below the tweet: