Elon Musk, Mark Zuckerberg and Sam Altman talk AI regs in Washington

September 14, 2023 Coin Telegraph

The majority of the tech leaders in attendance agreed that AI needs to be regulated with Elon Musk calling the meeting a game changer for civilization.

The top executives from some of the world’s largest tech and web companies have concluded a closed-door meeting with U.S. lawmakers in Washington D.C., where they reportedly discussed AI technology and potential approaches to regulation.

The Sept.13 Senate 'AI Insight Forum' was organized by Senate Majority Leader Chuck Schumer, and attended by 22 tech titans including X (Twitter) owner Elon Musk, Google’s Sundar Pichai, Meta CEO Mark Zuckerberg, Sam Altman from OpenAI and Microsoft founder Bill Gates, according to the New York Times.

Musk reportedly warned about existential risks from AI exclaiming “If someone takes us out as a civilization, all bets are off,” before adding:

“If you have exceptionally smart A.I., the Communist Party will no longer be in charge of China.”

Speaking to CNBC after the event, he said it is essential to have a “referee” for AI, implying that it needs to be regulated. Musk added that the meeting “may go down in history as being very important for the future of civilization.”

When questioned about AI regulation, he said almost everyone in the room agreed that it needs to happen.

There is an “overwhelming consensus” that there should be some AI regulation, Elon Musk says after today’s Capitol Hill AI meeting. pic.twitter.com/9QiPOffL3x
— CNBC (@CNBC) September 13, 2023

Google CEO Sundar Pichai reportedly said AI could help solve big problems, adding that the government needs to balance the “innovation side and building the right safeguards.”

“Over time, AI will be the biggest technological shift we see in our lifetimes. It's bigger than the shift from desktop computing to mobile, and it may be bigger than the internet itself.”

Meta's Mark Zuckerberg advocated for open-source AI, stating: “Open source democratizes access to these tools, and that helps level the playing field and foster innovation for people and businesses.”

Meta and Microsoft recently teamed up to launch Llama 2, an open-source large language model from Meta that will feature on Microsoft’s Windows and cloud computing platform Azure.

Microsoft's Bill Gates raised concerns about security risks, advocating for the government and private sector to work together to minimize them.

The potential of AI is limitless—but we will only realize that potential if government, the private sector, and civil society work together to maximize the technology’s benefits and minimize its risks.
— Bill Gates (@BillGates) September 14, 2023

Meanwhile, Sam Altman, CEO of OpenAI, the firm that created ChatGPT that arguably kicked off the AI frenzy in late 2022 called the meeting an unprecedented moment, adding:

“I think this will be a tool that will empower humanity to a degree that we can't even imagine,”

During the meeting, Altman said he believed policymakers want “to do the right thing” and was impressed with the speed by which the government wanted to create rules around the technology.

Sam Altman walking into AI Summit: “this is sort of an important, and urgent and in some ways unprecedented moment” pic.twitter.com/ohjozmt3jN
— Kailey Leinz (@kaileyleinz) September 13, 2023

The White House is expected to release an AI executive order this year while Congress is also considering AI legislation.

The closed-door forum was the first in a series but Senator Chuck Schumer said future meetings will likely be public.

“This is the most difficult issue that Congress is facing because AI is so complex and technical,” said Mr. Schumer.

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Rep. Tom Emmer reintroduces anti-CBDC bill to Congress

September 13, 2023 Coin Telegraph

CBDC

The bill would limit the Fed from issuing a CBDC which Tom Emmer called a surveillance tool that would "undermine the American way of life."

Legislation aimed at preventing “unelected bureaucrats in Washington” from issuing a central bank digital currency (CBDC) has been reintroduced by Representative Tom Emmer.

On Sep. 12, Emmer and 49 original co-sponsors revived the “CBDC Anti-Surveillance State Act” in the United States House of Representatives in a bid, they claim, to protect Americans’ right to financial privacy.

“The administration has made it clear: President Biden is willing to compromise the American people’s right to financial privacy for a surveillance-style CBDC,” Emmer, a Republican, said in a statement, adding:

“That’s why I’m reintroducing my landmark legislation to put a check on unelected bureaucrats and ensure the United States’ digital currency policy upholds our values of privacy, individual sovereignty, and free-market competitiveness,”

Emmer first proposed the bill to address CBDCs in January 2022. It was formally introduced to Congress in February 2023 with the aim of limiting the Federal Reserve from minting a programmable digital dollar which Emmer claims is a “surveillance tool that would be used to undermine the American way of life.”

Today, with 49 of my Republican colleagues, I reintroduced the CBDC Anti-Surveillance State Acthttps://t.co/mbke95IHBn
— Tom Emmer (@GOPMajorityWhip) September 12, 2023

The bill specifically prohibits the Fed from issuing a CBDC to individuals which Emmer says would stop it mobilizing into a retail bank able to collect personal financial data.

The bill also prohibits the central bank from using any CBDC to implement monetary policy.

In March, Tom Emmer warned against the weaponization of money as the federal government seeks to maintain and expand financial control.

U.S. presidential candidate Robert F. Kennedy Jr. echoed the sentiment in May stating, “That is why I oppose CBDCs, which will vastly magnify the government’s power to suffocate dissent by cutting off access to funds with a keystroke,”

Other supporters of the CBDC Anti-Surveillance State Act include Senators French Hill, Warren Davidson, and Mike Flood.

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Senators unveil bipartisan blueprint for comprehensive AI regulation

September 9, 2023 Coin Telegraph

Coin Telegraph

It is expected to be a guide in managing both the potential benefits and risks associated with AI technology.

Two senators unveiled a bipartisan blueprint for artificial intelligence (AI) legislation on Friday, Sep. 8, as Congress intensifies its endeavors to regulate this emerging technology.

The plan put forward by Senators Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) advocates for mandatory licensing for AI firms and makes it clear that technology liability protections will not shield these companies from legal actions.

In a statement on X (formerly known as Twitter), Blumenthal expressed that this bipartisan framework represents a significant step forward—a robust and comprehensive legislative plan for concrete and enforceable AI safeguards. It is expected to be a guide in managing both the potential benefits and risks associated with AI technology.

Hawley emphasized that the principles outlined in this framework should serve as the foundational basis for Congress to take action regarding AI regulation.

“We’ll continue hearings with industry leaders and experts, as well as other conversations and fact-finding to build a coalition of support for legislation.”

The framework proposes the creation of a licensing system overseen by an independent regulatory body. It mandates that AI model developers register with this oversight entity, which would possess the authority to conduct audits of these licensing applicants.

Additionally, the framework suggests that Congress should make it explicit that Section 230 of the Communications Decency Act, which provides legal protections to tech firms for third-party content, does not extend to AI applications. Other sections of the framework advocate for corporate transparency, consumer and child protection, as well as national security safeguards.

Blumenthal and Hawley, who lead the Senate Judiciary Subcommittee on privacy, technology and law, have also revealed plans for a hearing on Tuesday. This hearing will include testimony from prominent figures such as Brad Smith, Vice Chairman and President of Microsoft; William Dally, Chief Scientist and Senior Vice President of Research at NVIDIA; and Woodrow Hartzog, Professor at Boston University School of Law.

The unveiling of this framework, as well as the accompanying hearing announcement, precedes Senate Majority Leader Chuck Schumer's AI forum. This forum is set to feature leaders from leading AI firms who will provide lawmakers with insights into the potential advantages and risks associated with AI.

Schumer also introduced an AI framework in June. His framework outlined an extensive range of fundamental principles, as opposed to the more detailed measures proposed by Hawley and Blumenthal.

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US Senate confirms Philip Jefferson as Federal Reserve vice chair

September 6, 2023 Coin Telegraph

Coin Telegraph

Philip Jefferson, who has been serving as a Fed governor since 2022, will take on the No. 2 role under chair Jerome Powell at the central bank until 2036.

Federal Reserve governor Philip Jefferson has won confirmation from a majority of members of the United States Senate, placing him in position to become the Fed's next vice chair.

In a 88-10 vote in the U.S. Senate on Sept. 6, Jefferson won a majority of support needed for his confirmation as the next vice chair of the Fed. U.S. President Joe Biden announced in May that Jefferson was his pick to replace Fed governor Lael Brainard, who resigned in February.

Senators are also expected to vote on the nominations of Fed governor Lisa Cook for a full 14-year term and former U.S. Department of Labor chief economist Adriana Kugler for one of the board’s empty seats. If confirmed, Kugler and Cook would serve for terms both ending in 2037. Jefferson will serve as vice chair as part of his existing term as governor until 2036.

The makeup of leadership at federal institutions like the Fed, Securities and Exchange Commission, and Commodity Futures Trading Commission will likely impact how policymakers address ongoing regulation over cryptocurrencies and blockchain technology. Though the Fed reportedly has no plans to issue a digital dollar anytime soon, 2024 presidential candidate Ron DeSantis has made it clear he intends to bar the central bank from issuing a CBDC.

Fed chair Jerome Powell told lawmakers in June that he believes there should be a “robust federal role” in stablecoin regulation. He has also been supportive of many interest rate hikes in 2023, affecting markets across the country. Powell’s current term at the Fed is expected to end in 2028.

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Ronaldinho denies part in alleged $61M crypto scam at congressional hearing

September 1, 2023 Coin Telegraph

Ronaldinho denies part in alleged M crypto scam at congressional hearing

18kRonaldinho

The former pro soccer player said in a congressional hearing that his likeness was improperly used to market an allegedly fraudulent crypto scheme.

Retired pro soccer star Ronaldinho Gaúcho has testified at a congressional hearing in Brazil, denying his involvement in an alleged $61 million crypto pyramid scheme that bore his name.

On Aug. 31 Ronaldinho appeared before a parliamentary committee inquiry where he refuted any role in the scheme called "18kRonaldinho" that promised 2% daily returns on crypto. A lawsuit was filed against the firm seeking $61 million in damages.

Ronaldinho claimed he was never partnered with th company and it used his name and image without his authorization, arguing he was also a victim of the purported scheme.

During the hearing, images were shown of 18kRonaldinho’s marketing that depicted Ronaldinho.

*The inquiry showed an image of Ronaldinho with the text “Your money yielding up to 2% a day” (translated). Source: YouTube*

He said the pictures were taken as part of a contract he signed in July 2019 with a subsidiary of the company that sells watches but that contract was terminated later that year in October and was never executed.

The inquiry’s president Aureo Ribeiro asked Ronaldinho if he intended to reimburse those who invested in the company to which Ronaldinho said he would remain silent.

He also did not answer when asked about the $61 million lawsuit.

Ronaldinho had failed to appear before two previous hearings related to the inquiry, most recently on Aug. 24 in which he blamed weather conditions for not being able to attend.

The latest Aug. 31 hearing was his last chance to appear before Congress — if he didn’t he faced possible fines or arrest in which authorities would’ve forcibly taken him to appear at the hearing.

The inquiry was launched in June to investigate purported crypto pyramid schemes and is being carried out by Brazil’s lower house, the Chamber of Deputies.

It’s investigating a total of 11 companies alleged by the country’s Securities and Exchange Commission to have falsely promised high returns using crypto.

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US House Financial Services members scold Fed’s Powell for stablecoin bill obstruction

August 28, 2023 Coin Telegraph

Coin Telegraph

The committee members suspect the Fed is trying to hold up Congressional efforts to pass stablecoin legislation by restricting banks’ actions.

The Federal Reserve is seemingly running interference with congressional efforts to regulate stablecoins, according to a letter recently sent to Fed Chairman Jerome Powell. The letter came from Chairman of the U.S. House of Representatives Financial Services Committee Patrick McHenry and subcommittee chairs French Hill and Bill Huizenga.

The legislators were objecting to two Fed letters: SR 23-7 on the Novel Activities Supervision Program and SR 23-8 titled “Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens.” They wrote:

“We are concerned that these actions are being taken to subvert progress made by Congress to establish a payment stablecoin regulatory regime. Moreover, if these letters are left in place, they will undoubtedly deter financial institutions from participating in the digital asset ecosystem.”

The letters, issued simultaneously, supplement a January policy statement and impose additional limitations on activities with crypto assets.

According to the legislators, the Fed letters “effectively prevent banks from issuing payment stablecoins — or engaging in the payment stablecoin ecosystem” while “masked as guidance outlining a process by which these activities can be permissible.” The January policy extended restrictions placed by the Office of the Comptroller of the Currency on national banks to state banks.

In addition, the letter claimed that the Fed letters were issued without observing the notice and comment processes required by the Administrative Procedure Act.

Huge breakdown on stablecoin bill process; odds are this proceeding doesn't get done today and there's a new markup after Labor Day.

Ironically, this probably gives both sides more time for negotiations and for Chair McHenry to do direct negotiating with the White House. https://t.co/hNrQ2WF6RN
— Justin Slaughter (@JBSDC) July 27, 2023

The legislation referred to by the legislators is the Clarity for Payment Stablecoins Act of 2023, which McHenry introduced on July 20.

The committee members’ letter included a list of eight questions, the bulk of which concern implementation of the guidance found in the two Fed letters. Besides that, the letter demands records to determine the timeline of the drafting of the Fed letters.

Magazine: Opinion: GOP crypto maxis almost as bad as Dems’ ‘anti-crypto army’

US House Democratic coalition creates AI working group

August 16, 2023 Coin Telegraph

Representative Derek Kilmer will chair the Artificial Intelligence Working Group, which is aimed at introducing “sensible, bipartisan” policies for AI technology.

Democrats from the United States House of Representatives have formed a working group on artificial intelligence aimed at introducing new legislation around the nascent tech sector.

The 97-member New Democrat Coalition announced its AI working group on Aug. 15, stating it would work with President Joe Biden’s administration, stakeholders and lawmakers from both sides of the political arena to develop “sensible, bipartisan policies to address this emerging technology.”

The group will focus on a range of issues including how best to leverage AI for growth while still ensuring that workers who stand to lose their jobs as a result of AI can remain employed.

Artificial Intelligence is the biggest technological threat we've faced since the invention of the atomic bomb.

I am proud to be a part of the @NewDemCoalition's AI Working Group to assess the dangers and opportunities posed by AI and develop a framework to regulate it. https://t.co/99hGdHgb7x
— Rep. Seth Moulton (@RepMoulton) August 15, 2023

Representative Derek Kilmer will serve as chair of the AI working group and told CNBC the primary focus of the working group was to crack down on the spread of misinformation and aired concerns on advanced AI-generated deepfakes becoming increasingly prevalent online.

“There’s real concern about the potential for AI generated disinformation, real concern about misuse of advanced AI models.”

“That’s the type of thing that requires Congress to get smart and get smart fast,” Kilmer added.

Artificial intelligence is the next great frontier of technological advancement.

And we’re already seeing how breakthroughs in this emerging technology present both great opportunities and challenges with potential disruptions for workers, democracy, and national security. https://t.co/hflVef6k9Y
— Rep. Derek Kilmer (@RepDerekKilmer) August 15, 2023

Lawmakers, academics and top tech CEOs have all signaled the need to reign in on the potential dangers raised by AI.

In May, Vice President Kamala Harris, along with Biden’s top advisers, held a meeting with several AI industry CEOs to discuss concerns about the risks associated with AI.

In June, President Biden held a meeting with experts in AI in Silicon Valley to discuss a similar subject.

AI Eye: Is AI a nuke-level threat? Why AI fields all advance at once, dumb pic puns

Additional reporting by Felix Ng.

Lawmakers probe Apple’s App Store policies on blockchain, NFTs

July 29, 2023 Coin Telegraph

Apple

Their letter aimed to explore whether these guidelines might inadvertently hinder the progress and growth of cutting-edge innovations.

United States Representatives Gus Bilirakis and Jan Schakowsky penned a formal letter to Apple CEO Tim Cook about concerns related to the California-based company’s App Store, and the potential effect of its guidelines on emerging technologies like blockchain and nonfungible tokens (NFTs).

The letter requests information about whether the App Store’s guidelines might inadvertently hinder the progress and growth of cutting-edge innovations.

*Screenshot of the letter from the lawmakers addressed to Apple's CEO. Source: Bilirakis blog.*

The lawmakers observed a pattern in Apple’s approach to its App Store guidelines, where the company seemingly capitalized on and simultaneously limited the functionality of crypto apps. They pointed out that Apple achieved this by mandating the release of “lite” versions, which both generated profits for Apple and diminished the overall utility of the applications. As evidence, they specifically mentioned the case of Axie Infinity’s App Store experience.

By dispatching the letter, the lawmakers expressed apprehensions regarding the potential negative consequences of Apple's policies on the United States' standing in the realm of emerging technologies. The Chairman and Ranking Member of the Innovation, Data, and Commerce Subcommittee conveyed their viewpoint, noting that while Apple has justified these limitations as a means to enhance security through a "walled garden" approach, there is widespread concern that the company might be wielding the App Store as a tool to suppress competition.

They emphasized the utmost importance for Congress to gain a comprehensive understanding of the App Store Guidelines and to assess to what extent these guidelines may impede innovation and have an impact on American technological leadership. They added:

"Our subcommittee remains committed to promoting full transparency and ensuring that Big Tech is held accountable for monopolistic behavior,"

They stated that they intend to create a level playing field within the industry so that American ingenuity can continue to thrive. The lawmakers previously penned a similar letter to Apple regarding App Store policies relating to TikTok and other apps originating from China.

Magazine: GOP crypto maxis almost as bad as Dems’ ‘anti-crypto army’

Coinbase CEO Brian Armstrong Calls for Support of Legislation That Will Offer Regulatory Clarity for Crypto

July 27, 2023 The Daily Hodl

‘Pro crypto bill’ passes out of US House Agriculture Committee

July 27, 2023 Coin Telegraph

Coin Telegraph

The Republican bill, dubbed FIT for the 21st Century, was drafted by two House committees and passed after strenuous preparations by members of both parties.

Tact was pervasive in the United States House of Representatives Agricultural Committee’s consideration of the Financial Innovation and Technology for the 21st Century Act on July 27. With many references to bipartisanship and self-congratulatory mentions of the members’ cooperation and hard work, the committee plowed through a series of amendments calmly and quickly.

The bill, co-written by Republican members of the Agriculture and Financial Services Committee, seeks to create a comprehensive regulatory framework for digital assets. It was debated in the Financial Services Committee along with several other bills a day earlier.

Ranking member David Scott introduced the Democrats’ concerns, claiming that consumer protections need to be strengthened in the bill. It does not provide for third-party auditing, he said.

In addition, funding for the Commodity Futures Trading Commission (CFTC) was not increased in line with the new authorities the bill would give it, though it was later pointed out that the bill provides the CFTC with the minimum level of funding requested by chair Rostan Behnam.

The bipartisanship took a while to show through as Rep. Alma Adams called the bill “a fast track to investor confusion.” Her amendment to guarantee diversity on the boards of market participants was later voted down.

The provisional registration measures evoked comment from several legislators. Eventually, an amendment proposed by Rep. Yadira Caraveo to require provisionally registered parties to belong to a futures trade association was passed, with the purpose of providing some oversight of them while regulations were being worked out.

Shifting over to @HouseAgGOP as they markup the Financial Innovation and Technology for the 21st Century Act, Chair Thompson noted the following in his opening remarks:

"This legislation marks a significant milestone in the House Committee on Agriculture's efforts to create a…
— DeFi Education Fund (@fund_defi) July 27, 2023

Market participants will also be required to have physical addresses under an amendment by Rep. Jasmine Crockett. Disclosure requirements were also strengthened.

The chair, Rep. Glenn Thompson, and ranking member agreed to study decentralized finance further. The bill was successfully passed out of the committee.

The crypto community has vocally supported the bill. Crypto Council for Innovation CEO Sheila Warren praised the committee’s passage of the bill in a statement:

“It's a significant marker that shows keeping the status quo is not an option. There is too much at risk for consumers, US competitiveness and national security to take a back seat.”

Warren added, “The definition of ‘digital asset trading system’ should be narrowed and the new exclusion category to the definition of ‘digital asset’ included in Section 101 and the restrictions on mixed digital asset transactions further clarified.”

Magazine: Opinion: GOP crypto maxis almost as bad as Dems’ ‘anti-crypto army’

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