The US Securities and Exchange Commission has taken notice of AI tokens after its chairman, Gary Gensler, raised possible conflicts of interest in the artificial intelligence industry.
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Gensler acknowledged the revolutionary potential of AI in a series of posts on the social media platform X, but he also expressed concern about how “bad actors” might utilize it to manipulate the stock market.
The declarations highlight the SEC’s dedication to upholding objectivity in technology-related topics by putting an emphasis on results rather than the instruments themselves.
Customer Interest In AI Tokens Is Prioritized
In a notable shift in regulatory focus, Gensler explained the need for platforms working with AI tokens to put the interests of their customers ahead of the optimization features built into AI systems.
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The concern lies in the potential for conflicts of interest arising from algorithms designed to maximize profits, potentially disregarding the well-being of customers.
The market reacts as the SEC urges caution
The cryptocurrency market has already been affected by Gensler’s comments. The value of linked tokens in the emerging but quickly developing field of blockchain-based artificial intelligence cryptocurrencies fell.
The rise of AI cryptocurrencies like Render, SingularityNET, and Injective is notable because they use blockchain to monetise AI applications, automate trading, and improve logistics in the supply chain.
The expanding nexus between finance, technology, and artificial intelligence has prompted the SEC to turn its attention to these tokens. Interest in AI technologies has increased, pushing crypto companies to take advantage of the trend, as seen by the introduction of ChatGPT in November 2022.
These events show how innovation and regulation must strike a careful balance in order to advance technology while protecting consumers and the integrity of the market.
Gensler’s recognition of AI’s promise and drawbacks demonstrates the SEC’s proactive approach to embracing cutting-edge technologies.
By addressing the potential for conflicts of interest with AI tokens, the agency hopes to create a legal framework that encourages innovation while upholding the highest moral and consumer protection standards.
The market’s response and the continuous development of AI cryptocurrencies will remain at the center of the financial and technology discourse as the legal landscape changes.
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