SEC Chair Gary Gensler shared his perspective on the challenges associated with the application of artificial intelligence and cryptocurrencies in the finance sector.

The Role of AI in the Financial Sector

Gensler compared the impact of artificial intelligence on the financial sector to the development of the internet and even electricity. He noted that AI has become an integral part of the financial industry, influencing brokerage practices and investment advisors.

Risks of AI in Finance

The SEC Chair expressed concerns about the ethical use of AI in finance, particularly the potential conflicts of interest. Gensler pointed out the risk of using similar AI models across companies, which could lead to systemic financial risks if the technology fails.

Cryptocurrency Regulation and Investor Protection

When it comes to cryptocurrencies, Gensler emphasized that blockchain and decentralized ledger technologies are not incompatible with existing securities laws. However, he noted that crypto projects must meet disclosure requirements and protect investors from fraud. He also acknowledged the possibility of new legal frameworks to regulate the sector.

Despite the rapid advancement of technologies, Gary Gensler maintains that sound laws and regulations are necessary to protect investors and maintain trust in the capital markets.