The SEC Chair requested Congress for more funding this fiscal year to enhance and match emerging technologies like blockchain and artificial intelligence.
On Tuesday, the Chairman of the United States Securities and Exchange Commission (SEC) Gary Gensler testified before the Senate Banking Committee at the Capitol building. During the hearing, Gensler was grilled on the measures the agency has put in place to protect investors from financial malpractices. At one point, senior United States Democratic senator representing Nevada, Catherine Marie Cortez Masto, asked Gensler how the agency is tapping into emerging technologies like artificial intelligence (AI) to enhance its regulatory oversight.
In response, Gensler noted that the SEC is already using AI to look for patterns in the market. Gensler highlighted that the agency is working on developing its technology portfolio and thus requires more funding during this fiscal year.
“So, we already do. In some market surveillance and enforcement actions. To look for patterns in the market. … It’s one of the reasons why we’ve asked Congress for greater funding this year, in 2024, to help build up our technology budget for the emerging technologies,” Gensler said.
Why the SEC Needs AI to Enhance Its Regulatory Oversight
The United States Securities and Exchange Commission is facing fast-growing financial markets, amid the democratization of capital formation through emerging technologies like blockchain. Tasked with the responsibility of protecting investors, the SEC Chair has severally highlighted the need for artificial intelligence to equip its officers with the necessary tools.
During a speech before the national press club on July 17, 2023, a few days after the Ripple summary judgment that largely ruled XRP is not a security, SEC Chair Gensler noted that the agency will continue to tap into the artificial intelligence but remain technology-neutral.
“While recognizing the challenges, 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,” Gensler noted.
Notably, the SEC has accused the crypto market of enabling fraudulent activity similar to the OneCoin project that stole about $4 billion from more than 3.5 million investors. Already, the US SEC has charged several crypto firms including Binance with listing unregistered securities. Nonetheless, the US SEC has received several blows through the judicial system after being accused of doing shoddy research work.
For instance, Judge Analisa Torres ruled that the SEC did not provide enough evidence to prove that XRP is a security. Similarly, the D.C. Circuit Court of Appeal ruled that the SEC failed to show how Grayscale Investments’ bid to convert its GBTC to spot Bitcoin ETF is different from the BTC Futures it had previously approved.
In a bid to ensure concrete evidence in its charges, the SEC Chair Gary Gensler has highlighted the need for the agency to adopt AI.
Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology.
Let us all WIN!
