CFTC Commissioner Johnson Proposes AI Recommendations, Looping in DeFi

The Commodity Futures Trading Commission's Kristin Johnson proposed recommendations such as heightened penalties to address artificial intelligence in financial markets, including decentralized finance. In a speech delivered at the Sidley Austin and Rutgers Law School Fintech and Blockchain Symposium, Commissioner Johnson outlined her concerns about AI and how that applies to DeFi. "Deploying AI in ecosystems running on blockchain technology raises novel issues for supervision, risk management, and compliance, as well as enforcement" Johnson said on Friday. AI has been integrated into financial markets, including brokerage apps, compliance programs and robo-advisers. In DeFi, AI can be used in automated trading and algorithmic trading. AI in general has raised concerns among regulators over risks such as manipulation and fraud, bias and customer protection. 

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