Democrats in Congress demand strict SEC regulation of AI trading: threat of market manipulation
Tensions are rising in Washington over the use of artificial intelligence in financial markets. A group of influential Democrats in the House of Representatives has sent an official request to SEC Chairman Paul Atkins. Their main complaint is the complete lack of regulatory oversight over AI agents, which are increasingly executing trades on behalf of retail investors.
The letter was authored by Congressmen Bill Foster and Brad Sherman. In their view, the current situation poses a direct threat to market integrity. Developers of AI algorithms and brokerage platforms are effectively operating in a "gray zone," making critically important investment decisions for millions of users while bearing no legal responsibility.
"AI companies are largely functioning outside securities regulation. It is critically important that technology does not become a convenient tool for concealing conflicts of interest or carrying out market manipulation," the letter emphasizes.
The trigger for concern was the explosive growth in popularity of AI assistants in the crypto industry. In early June, the exchange Coinbase launched its own virtual advisor, which provides trading recommendations. Lawmakers note that such platforms systematically disclaim responsibility for the accuracy of their algorithms' predictions, shifting all risks onto the user.
Congressmen have set strict deadlines for the SEC: by July 31, the agency must provide clear answers to three key questions:
- What protective mechanisms are already being applied to AI agents?
- In which cases are such bots required to undergo mandatory registration?
- Does the SEC currently have sufficient authority to oversee this sector, or is direct Congressional intervention necessary?
Recall that back in June, Anthropic CEO Dario Amodei called for stricter oversight of AI models, confirming the systemic nature of the problem.
My analysis. The situation has been brewing for a long time. AI trading is no longer the future but a reality growing exponentially. The SEC, traditionally slow in matters of new technologies, risks ending up with a market where millions of dollars are moved by algorithms without any control. The Democrats' demand is not just a political initiative but an attempt to prevent a potential collapse when the AI "black box" starts generating losses and no one is held accountable. The only question is whether the regulator will act in time.