AI Fraud Task Force: CFTC Commissioner’s Proposal

During a recent meeting of the United States Commodity Futures Trading Commission (CFTC) Technology Advisory Committee (TAC), CFTC Commissioner Kristin Johnson outlined three proposals for regulating artificial intelligence (AI) technologies in U.S. financial markets. Johnson proposed the establishment of a “principles-based framework” for assessing the risks of integrating AI into financial markets, stricter penalties for intentional misuse of AI, and the creation of a task force to evaluate and harmonize guidance and regulation related to AI in financial markets.

While the government often calls for the creation of investigatory task forces and risk assessment measures, Johnson’s suggestion of imposing “heightened penalties” for crimes committed with AI would bring significant changes to the existing legal framework. In support of this proposal, Johnson referenced a speech by U.S. Deputy Attorney General Lisa Monaco, who compared AI to firearms in terms of enhancing the danger of a crime. Johnson argued that intentional misuse of AI for fraud, market manipulation, or evasion of regulations should be met with increased penalties to deter bad actors.

This speech by Commissioner Johnson follows the recent appointment of Ted Kaouk as the CFTC’s first Chief AI Officer. Kaouk previously held the position of Chief Data Officer and Director of the Division of Data at the CFTC. Congresswoman Maxine Waters, the ranking member of the Financial Services Committee, wrote a letter to President Joseph Biden recommending Johnson for the position of Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury. If nominated and approved, Johnson would have an influential role in shaping legislation and policies pertaining to the U.S. financial market.

5 thoughts on “AI Fraud Task Force: CFTC Commissioner’s Proposal

  1. Kudos to Commissioner Johnson for emphasizing the need to harmonize guidance and regulation related to AI in financial markets. This will bring clarity and consistency, benefiting both industry players and investors.

  2. Really?! Creating a task force to evaluate and harmonize guidance and regulation? Just another bureaucratic nightmare.

  3. I appreciate Commissioner Johnson’s forward-thinking mindset in proposing stricter penalties for intentional misuse of AI. It’s crucial to deter bad actors and protect the financial system from fraud and manipulation.

  4. Maxine Waters recommending Johnson for a higher position? Birds of a feather flock together, I guess. 🙄🐦

  5. More regulation just means more red tape. Let the market deal with AI on its own. This proposal is unnecessary.

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