United States Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson has put forward three proposals for regulating the use of artificial intelligence (AI) in the country’s financial markets. Speaking at a Technology Advisory Committee meeting on May 2, Johnson outlined the CFTC’s plan, which includes establishing a principles-based framework to evaluate the risks associated with integrating AI into financial markets. Additionally, Johnson proposed implementing stricter penalties for the intentional misuse of AI and creating a task force to assess and harmonize guidance, supervision, and regulation pertaining to the increasing use of AI in financial markets.
While government calls for investigatory task forces and risk assessment platforms are not uncommon, Johnson’s suggestion of imposing heightened penalties for AI-related crimes would bring significant changes to the existing legal framework. Johnson referred to a previous speech by U.S. Deputy Attorney General Lisa Monaco, who drew a parallel between firearms and AI, stating that both can enhance the danger of a crime. Johnson believes that the emergence of AI technologies and their potential for misuse should be treated accordingly.
This announcement from Johnson follows the recent appointment of Ted Kaouk as the CFTC’s first chief AI officer. Kaouk previously served as the chief data officer and director of the division of data within the CFTC.
In a separate development, Representative Maxine Waters, the ranking member of the Financial Services Committee, has written a letter to U.S. President Joe Biden recommending Johnson for the role of assistant secretary for financial institutions at the U.S. Department of the Treasury. If nominated and approved, Johnson would play a crucial role in shaping legislation and policies pertaining to the U.S. financial market.
Relatedly, the UK government has called for action on AI copyright and market competition.