Democrats in the U.S. Congress are demanding strict regulation of AI trading from the SEC.
A group of Democrats from the U.S. House of Representatives has sent an official letter to SEC Chairman Paul Atkins, expressing serious concern over the complete lack of oversight of AI agents that are already actively executing trades on behalf of retail investors. This is not just a bureaucratic request — it is a signal of an impending regulatory battle at the intersection of artificial intelligence and financial markets.
Congressmen Bill Foster and Brad Sherman, the authors of the appeal, directly state that the activities of such services threaten market integrity. In their view, AI developers and brokers implementing these technologies are operating in a legal vacuum, even though they are effectively making key investment decisions for users. This creates a dangerous precedent where algorithms, devoid of human accountability, influence the capital of millions of people.
"AI firms are largely functioning outside securities regulation. It is crucial that these technologies do not become a tool for masking conflicts of interest or market manipulation," the politicians emphasized in their appeal.
The reason for such a tough stance was the explosive growth in popularity of AI assistants, particularly in the crypto industry. In early June, the Coinbase exchange launched its own AI trading advisor, which served as a trigger for lawmakers. The authors of the letter stress that such platforms often disclaim any responsibility for the accuracy of predictions, shifting risks onto users who trust the algorithm's "black box."
By July 31, the SEC is required to provide Congress with answers to three key questions:
- What protective mechanisms are already in place to regulate AI agents?
- In what cases must such trading bots undergo official registration as brokers or investment advisors?
- Does the SEC currently have sufficient authority to oversee this sector, or is urgent congressional intervention needed?
Recall that in June, Anthropic CEO Dario Amodei also called for stricter oversight of AI models, indicating a growing consensus among key market players.
My analysis: This request is just the beginning. The SEC will likely be forced either to recognize AI agents as full-fledged market participants with corresponding licensing requirements, or to face direct legislative regulation from Congress. For the crypto industry, this means the era of the "Wild West" for algorithmic trading is coming to an end. Investors should prepare for the possibility that many popular AI bots will either disappear or be forced to radically change their business models.