SEC’s new AI-related rules target brokers: Game-changer for AltSignals?

• SEC approved new AI-related rules targeting brokers on July 26.
• This comes amid growing adoption of AI across all areas of the global economy.
• What does this mean for AltSignals, the trading firm behind the upcoming ActualizeAI.

Regulation remains a huge factor in the overall growth and adoption of cryptocurrency, and the US Securities and Exchange Commission (SEC)’s recent onslaught on crypto exchanges reveals just as much.

Also, days after it suffered a blow in its case against Ripple over XRP, the SEC has moved to approve new rules with regard to likely conflict of interest as broker platforms increasingly integrate artificial intelligence. What does this mean and does it impact AltSignals?

What the SEC’s new rules on AI application by brokers says

Brokers, basically platforms that facilitate the exchange of crypto for crypto or fiat, use optimization technology. The SEC is looking to adopt new rules around these “optimization functions”, with changes prohibiting brokers from leveraging AI or data analytics tools to their own advantage.

According to details in a fact sheet the agency published on July 26, the use of these technologies, including algorithms and models, creates potential conflict of interest. In particular, when broker firms tap into the highlighted technology to foster investor interaction, possible conflict of interest arises when the firms use these to lure the same investors.

The changes to AI use applies to crypto transactions involving broker-dealers registered with the securities regulator and will go to a final vote after the end of a 60-day period for public feedback. Meanwhile, the SEC has acknowledged that at the moment, no crypto entity is duly registered as a national securities exchange.

Good news for AI-powered crypto trading platforms like Fetch.ai and AltSignals? It’s still early days in terms of regulation of AI and we cannot forestall what might come down the road. However, clarity for both the crypto industry and the artificial intelligence space could be what sparks the next adoption wave for the likes of AltSignals.

The European Union’s recently adopted EU AI Act and similar efforts in the US has seen many AI behemoths, including Google’s Alphabet Inc., Microsoft and Meta pursue safeguards that will align the sector to regulatory measures aimed at protecting consumers.

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