US SEC Chair Gary Gensler Warns Against AI And Crypto Fraud

The US Securities and Exchange Commission (SEC) Chair Gary Gensler has warned the public against AI and Crypto fraud. The meteoric rise in the use of Artificial Intelligence (AI) tools and the growing frequency at which they are constantly launched has mandated the need for users to stay cautious.

The Need for the US SEC Chair AI and Crypto Warning

The US SEC Chair took to X to encourage users to remain vigilant while utilizing AI and other emerging technologies. He precisely told his followers to keep their money safe from these purported technologies. The SEC Chair statement likely stemmed from concerns about how often people fall victim to AI fraud.

‼️ INVESTOR ALERT ‼️

Keep your money safe from fraud involving the purported use of artificial intelligence (AI) and other emerging technologies. Check out the @SECGov Investor Ed Alert ⬇️ https://t.co/dZOU60Z4tH pic.twitter.com/PiCzkjZxIc

— Gary Gensler (@GaryGensler) July 31, 2024

Since the beginning of this year, AI firms have launched quite some models with the hope of making life easier for their users. In April, Sam Altman’s OpenAI, Google, and French AI startup Mistral revealed updated versions of their models. More AI tools have shown up since then including OpenAI’s newly released SearchGPT, which is designed to compete with Google search engine.

Recently, the Sam Altman-led firm also made a significant update to ChatGPT, adding a voice chatbot to the model.

As these tools increased, the authorities beyond the US SEC Chair are also identifying the rise in AI-related crimes. Some fraudulent schemes misused AI technology to attract investors with promises of high returns. The Commodity Futures Trading Commission’s Office of Customer Education and Outreach (OCEO) went as far as releasing a notice to discuss the matter.

AI Firms Takes Safety Serious

Oftentimes, the perpetrator of these scams use AI-powered trading bots, signal algorithms, and crypto-asset arbitrage algorithms. At another time, they used deepfakes to impersonate top financial firm founders like Ripple CEO Brad Garlinghouse and MicroStrategy chairman Michael Saylor.

Moreso, the creators of the AI tools are becoming more conscious about ensuring that their models are risk-free. A few weeks ago, Google, Microsoft, Nvidia, and OpenAI launched the Coalition for Secure AI (CoSAI) to address AI safety concerns. The CoSAI initiative is aimed at establishing robust security frameworks and standards for AI development and deployment.

While the SEC increase its watch over the AI landscape, the regulator has began to show leniency toward crypto. At the same time, crypto behemoth are still bent on exposing the flaws of the SEC’s administration. 

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