SEC’s Gary Gensler believes AI can strengthen its enforcement regime
Gary Gensler, the chair of the United States Securities and Exchange Commission, believes staff at its agency could benefit from greater use of artificial intelligence.
During a July 17 speech before the National Press Club, where he later broke his silence about the recent Ripple court ruling, Gensler listed several potential use cases of AI that could assist the regulator in its role as securities watchdog.
"We at the SEC also could benefit from staff making greater use of AI in their market surveillance, disclosure review, exams, enforcement, and economic analysis,” he said.
The SEC has hit up at least 54 cryptocurrency firms with enforcement actions between 2018 and the first half of 2023. The collapse of FTX in November was followed by a dramatic increase in the rate of these actions.
While Gensler didn’t provide more detail on how the agency could use AI, the SEC Chair spoke highly of the technology and the positive impact that it can have on humanity on financial markets:
“I believe it’s the most transformative technology of our time, on par with the internet and mass production of automobiles,” Gensler added.
Despite the overall positive sentiment, Gensler highlighted that many AI systems are filled with bias and deception, infringe on privacy rights and present several conflicts of interest.
On the issue of bias, Gensler said some predictive AI models reflect historical biases which makes the system less accurate and in some cases, lead to an entirely false prediction.
Gensler highlighted that he was even a victim of misinformation when a fake AI-generated text of his resignation began circulating on the internet.
Related: Breaking: Judge rules XRP is not a security in SEC's case against Ripple
Gensler added
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