- Mike Novogratz has bemoaned the differing regulatory approaches to crypto and AI.
- The CEO fears that, left unchecked, AI-generated Deep Fakes could become prevalent.
- Novogratz added that the regulatory backlash in the U.S. because of one man is “dumb.”
In the nascent emerging technology world, artificial intelligence (AI) has shot to prominence with the emergence of user-facing chatbots like ChatGPT. The AI sector has soared with very little limitation or regulation, while crypto is currently being subject to hardline policing and regulatory scrutiny.
Galaxy Digital CEO Mike Novogratz told investors in a shareholder update on March 28 that he believes the U.S. government has got it wrong in focusing its regulatory attention on crypto and not AI.
“Completely Upside-Down”
Crypto has been in the firing line of agencies such as the SEC and CFTC. Coinbase, Ripple, Paxos, and other household crypto names have all faced the ire of regulatory bodies in the past few months. However, AI companies have not faced the same scrutiny, which is concerning and irksome for Novogratz.
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“When I think about AI, it shocks me that we’re talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government’s got it completely upside-down,” the CEO explained.
Crypto regulatory policing increased in recent months in the U.S. following the collapse of FTX and other high-profile bankruptcies. However, the dangers of AI are yet to be realized, but they have been witnessed. Novogratz explains that ‘Deep Fakes’ will be a threat that needs controlling.
“Pretty soon, you’re going to get a fake Mike Novogratz, hopefully with hair. You know, like, the deep fake world is going to be so much more prevalent.”
The CEO also bemoaned the fact that crypto and blockchain innovation is being stymied because of one man’s fallen crypto empire.
Bankman-Fried’s Bermuda Shorts
Since the fall of FTX in November last year, regulation of crypto in the U.S. has become notably more hardline. Bodies like the SEC are holding the fallen exchange up as a warning of what the industry will be without its policing. For Novogratz, this is “dumb.”
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“It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period.”
On the Flipside
- The AI sector is not moving ahead totally unchecked, as the U.S. Chamber of Commerce called for regulation of AI technology on March 9 to ensure it does not hurt growth or become a national security risk.
Why You Should Care
Innovative technology often comes up against regulatory pressure, which can curtail its growth. The situation in the U.S. makes it a hostile ground for crypto companies to flourish, but AI could also face its “FTX moment” and lead to a knee-jerk regulatory reaction.
Read more about Nvidia’s preference for AI over crypto:
Nvidia CTO Deems Crypto Useless While Advocating for ChatGPT AI.
Read more about Binance’s increased integration of TUSD:
Binance Finalizing BUSD Phase Out with New Range of TUSD Pairs.
