CFTC Commissioner Kristin Johnson believes that artificial intelligence can provide a significant advantage to the crypto sector, but it could also exacerbate the risk of fraud.
Speaking at Digiassets 2025, Johnson said machine learning and neural networks are analyzing huge amounts of data in real time, including price action and social media sentiment.
She praised the possibility that AI could speed up payment times and help businesses achieve compliance, but Johnson warned that these models could hallucinate them as “incapable of understanding certain real-world obstacles.”
The risks surrounding bias and data privacy invasion were one of the other threats Johnson highlighted. And during a speech at the London Conference, she warned that AI could cause harm to consumers.
“It really becomes a concern when AI is used to manipulate market participants or directly manipulate the market,” Johnson said.
“The rise in penalties”
The CFTC commissioner emphasized that he has long pushed “intensifying fines” against fraudsters who use AI to engage in criminal activity and deceive unsuspecting consumers.
She highlighted one case in which the con man claimed to have a “Ai-Enhanced” Bitcoin investment strategy. More than 23,000 victims have been identified, and the perpetrators have been ordered to repay $1.7 billion in reparations.
In a later Q&A session, Johnson announced in May that he would step down from his role at the CFTC later this year, but promoted the election of CFTC president Brian Quintz, who previously served as commissioner. Quintenz has not yet been confirmed following the Senator’s hearing last week.
“I know Brian very well,” she said. “I think he understands how ropes and committees work, but most importantly, he has an incredible sense of value that the committee can bring to the market.”
Johnson also opposed the notion that the US had implemented a “full 180” on crypto policy, but acknowledged that industry-specific regulations are likely to move through Congress.
“That’s definitely a different outcome than what we saw in the previous administration,” she added.
Edited by Steve Graves
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