AI Can Help the Crypto Market, CFTC Commissioner Johnson States– But Also Increase Scams
CFTC Commissioner Kristin Johnson thinks that artificial intelligence can provide substantial advantages for the crypto sector– however it may likewise worsen the risk of fraud. Speaking at DigiAssets 2025, Johnson said artificial intelligence and neural networks are now analyzing large quantities of data in real time, consisting of price action and social media sentiment. While she applauded AI’s potential for accelerating settlement times and helping companies achieve compliance, Johnson warned that these models can hallucinate “or lack the capability to understand certain real-world obstructions.” Threats surrounding bias and data privacy breaches were among the other risks Johnson highlighted– and throughout her speech at the London conference, she warned that AI has the potential to cause consumers damage. “It becomes truly concerning when AI is used to manipulate market participants or manipulate markets directly,” Johnson stated. “Increased penalties.” The CFTC commissioner stressed that she has long advocated for “increased penalties” for scammers who use AI to engage in criminal conduct and deceive unsuspecting consumers. She highlighted one case where a scammer claimed he had an “AI-enhanced” Bitcoin investment strategy, with an automated bot that would facilitate extraordinary returns. More than 23,000 victims were identified, with the perpetrators subsequently ordered to repay $1.7 billion in restitution. In a later Q&A session, Johnson– who announced in May that she will step down from her role at the CFTC later this year– praised Trump’s choice for CFTC chairman Brian Quintenz, who has also previously served as a commissioner. Quintenz still has yet to be confirmed, following a Senate hearing last week. “I know Brian well,” she said. “I think he understands the ropes and how the commission works– but most importantly, he has an incredible sense of the value that the commission can provide markets.” Johnson also pushed back against the idea that the U.S. has executed “a complete 180” when it comes to crypto policy, but conceded that we are now more likely to see industry-specific regulation move through Congress. “That, I would say, is certainly a different outcome than what we saw during the previous administration,” she added. Edited by Stephen Graves
