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UK AI Safety Summit: Musk likens AI to ‘magic genie,’ says no jobs needed in future

The second day of the U.K. AI summit featured a one-on-one talk between Prime Minister Rishi Sunak and Elon Musk, who discussed the future of the job market, China and AI as a “magic genie.”

The United Kingdom’s global summit on artificial intelligence safety, the AI Safety Summit, concluded on Nov. 2 with a one-on-one chat between U.K. Prime Minister Rishi Sunak and billionaire Elon Musk. 

Musk was one of the many big names to attend the summit, including heads of OpenAI, Meta, Google and its AI division DeepMind, along with leaders from 27 countries. Musk’s nearly hour-long chat with Sunak was one of the main events of the second day.

Their conversation touched on everything from AI risks to China and opened with Elon Musk likening the emerging technology to a “magic genie.”

“It is somewhat of the magic genie problem, where if you have a magic genie that can grant all the wishes, usually those stories don’t end well. Be careful what you wish for.”

Both mentioned these intelligent bots needing a physical “off-switch” and drew parallels to science-fiction movies like The Terminator. “All these movies with the same plot fundamentally all end with the person turning it off,” Sunak said.

Musk commented: 

“It’s both good and bad. One of the challenges in the future will be, how do we find meaning in life if you have a magic genie that can do everything you want?”

This was brought up after governments and AI companies came to an agreement to put new models through official testing before their public release, which Sunak called a “landmark agreement.”

Related: NIST establishes AI Safety Institute Consortium in response to Biden executive order

When asked about AI's impact on the labor market, Musk called it the most “disruptive force in history” and said the technology will be smarter than the smartest human. 

“There will come a point where no job is needed. You can have a job if you want to have a job for personal satisfaction, but the AI will be able to do everything.”

"I don't know if that makes people comfortable or uncomfortable,” Musk concluded.

In addition, Musk commented on China’s inclusion in the summit, saying their presence was “essential.” “If they’re not participants, it’s pointless,” he said. 

"If the United States and the UK and China are aligned on safety, then that's going to be a good thing, because that's where the leadership is generally.”

Over the last year, the U.S. and China have gone head-to-head in the race to develop and deploy the most advanced AI systems.

When Sunak asked Musk what he believes governments should be doing to mitigate risk, Musk responded:

“I generally think that it is good for the government to play a role when public safety is at risk; for the vast majority of software, public safety is not at risk. But when we talk about digital super intelligence, which does pose a risk to the public, then there is a role for the government to play to safeguard the public.”

He said while there are people in “Silicon Valley” who believe it will crush innovation and slow it down, Musk assured that regulations will “be annoying” but having what he called a “referee” will be a good thing. 

“Government to be a referee to make sure there is sportsmanlike conduct and public safety are addressed because at times I think there is too much optimism about technology.”

Since the rapid emergence of AI into the mainstream, governments worldwide have been rushing to find suitable solutions for regulating the technology. 

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5 nations challenge crypto experts and investigators to target tax crimes

The J5 generates significant leads through events, which, in the past, has helped uncover multimillion-dollar crypto Ponzi schemes, such as the BitClub Network.

The Joint Chiefs of Global Tax Enforcement (J5), a global anti-tax fraud group, hosted investigators, cryptocurrency experts and data scientists in “The Cyber Challenge” event to track down individuals and organizations committing tax fraud.

The J5 members comprise the criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States, which collaborate in the fight against international and transnational tax crime and money laundering.

The group includes the Australian Taxation Office, the Canada Revenue Agency, the Dutch Fiscal Information and Investigation Service, His Majesty’s Revenue and Customs from the U.K. and IRS-CI from the United States. Participants included experts from J5 countries, which were tasked with optimizing the usage of data acquired from a variety of open and investigative sources available to each country.

J5 members include criminal intelligence communities from Australia, Canada, the Netherlands, the United Kingdom and the United States. Source: irs.gov

Since its inception in 2018, the J5 has hosted five such events. In 2022, the fourth event focused on nonfungible tokens (NFTs) and decentralized exchanges (DEX). Sharing details about the latest 2023 event, the U.S. Internal Revenue Service report stated:

“This is the first Challenge where Financial Intelligence Units (FIUs) from each J5 country participated. Private sector was represented by blockchain analysis companies Chainalysis, BlockTrace, and AnChain making this the most collaborative Challenge to date.”

In the process, the J5 generated significant leads for further investigation, which, in the past, helped uncover multimillion-dollar crypto Ponzi schemes, such as the BitClub Network. John Ford, deputy commissioner of the Australian Taxation Office, stated:

“This collaboration between public and private specialists not only generates operational outcomes, but shares expert training, techniques and procedures, which is integral for the participants to remain proactive and effective in a rapidly evolving operating environment.”

Ryan Ryder from Chainalysis pointed out that crypto’s inherent transparency, coupled with international public and private sector experts, “can collaborate to identify and shut down illicit activity,” a task that remains impossible in traditional finance.

Related: G7 countries to launch AI code of conduct: Report

The Cointelegraph Innovation Circle recently featured seven crypto experts in an article to help Web3 companies prep for tax season. First and foremost, Web3 companies must constantly monitor the tax implications of their activities and diligently work to ensure they’re meeting their obligations.

In addition, the members of the Cointelegraph Innovation Circle recommended seven best practices to ensure adherence to tax formalities. Choosing a tax-friendly country while ensuring on-time payment is a top priority, in addition to avoiding shortcuts and finding an experienced crypto tax accountant.

Other key factors include accurate documentation of all activities, seeking expert legal counsel, automating transaction tracking and using specialized software.

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SEC seeks summary judgment in Do Kwon and Terraform Labs case

The “evidence” of violations provided by the SEC points to Kwon’s involvement in misleading crypto investors by creating and marketing Terra and its in-house Terra (LUNA) tokens as securities.

The United States Securities and Exchange Commission (SEC) has refuted the jury’s conclusion regarding Terraform Labs’ alleged violations and has demanded a summary judgment on all the claims. 

A court filing from Oct. 27 showed the SEC’s reluctance to accept the jury’s leniency on Do Kwon and his involvement in facilitating the frauds that eventually led to the collapse of Terraform Labs. The filing, directed to the U.S. district court - Southern District of New York, read:

“No rational jury could conclude that Kwon was not liable for Terraform’s violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder pursuant to Exchange Act Section 20(a).”

The “evidence” of violations provided by the SEC points to Kwon’s involvement in misleading crypto investors by creating and marketing Terra and its in-house Terra (LUNA) tokens as securities.

SEC seeks summary judgment in Do Kwon and Terraform Labs case in NY district court. Source: courtlistener.com

On the same day, Do Kwon and Terraform Labs asked the judge to toss SEC’s lawsuit — arguing that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR) and its mirrored assets (mAssets) are not securities as the SEC alleged.

However, the SEC maintains that Kwon and Terraform Labs offered and sold securities, sold LUNA and MIR in unregistered transactions, engaged in transactions involving mAssets and committed fraud.

Related: Terraform co-founder Shin blames protocol for collapse during trial in S. Korea

While Terra co-founder Daniel Shin’s lawyer blamed the “unreasonable operation of the Anchor Protocol and external attacks carried out by Do-hyung Kwon” for the Terra ecosystem collapse, the company recently blamed market maker Citadel Securities for its role in an alleged “concerted, intentional effort” to cause the depeg of its TerraUSD (UST) stablecoin in 2022.

Screenshot from filing from Terraform compelling Citadel to provide additional documents. Source: CourtListener

Citadel Securities told Cointelegraph in a statement: “This frivolous motion is based on false social media posts and ignores information we already provided confirming we had no role whatsoever in this matter.”

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NIST establishes AI Safety Institute Consortium in response to Biden executive order

Documentation from NIST states the consortium will adopt a “broad human-centered focus” with “specific policies.”

The United States National Institute of Standards and Technology (NIST) and the Department of Commerce are soliciting members for the newly-established Artificial Intelligence (AI) Safety Institute Consortium. 

In a document published to the Federal Registry on Nov. 2, NIST announced the formation of the new AI consortium along with an official notice expressing the office’s request for applicants with the relevant credentials.

Per the NIST document:

“This notice is the initial step for NIST in collaborating with non-profit organizations, universities, other government agencies, and technology companies to address challenges associated with the development and deployment of AI.”

The purpose of the collaboration is, according to the notice, to create and implement specific policies and measurements to ensure US lawmakers take a human-centered approach to AI safety and governance.

Collaborators will be required to contribute to a laundry list of related functions including the development of measurement and benchmarking tools, policy recommendations, red-teaming efforts, psychoanalysis, and environmental analysis.

These efforts come in response to a recent executive order given by US president Joseph Biden. As Cointelegraph recently reported, the executive order established six new standards for AI safety and security, though none appear to have appear to have been legally enshrined.

Related: UK AI Safety Summit begins with global leaders in attendance, remarks from China and Musk

While many European and Asian states have begun instituting policies governing the development of AI systems, with respect to user and citizen privacy, security, and the potential for unintended consequences, the U.S. has comparatively lagged in this arena.

President Biden’s executive order marks some progress toward the establishment of so-called “specific policies” to govern AI in the US, as does the formation of the Safety Institute Consortium.

However, there still doesn’t appear to be an actual timeline for the implementation of laws governing AI development or deployment in the U.S. beyond legacy policies governing businesses and technology. Many experts feel these current laws are inadequate when applied to the burgeoning AI sector.

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Marathon Digital will use landfill methane to mine Bitcoin in Utah pilot project

The BTC miner has partnered with startup Nodal Power for a green, off-grid project that is a small start for a potentially big advancement.

Marathon Digital has begun mining Bitcoin (BTC) using power generated from methane gas siphoned off a landfill. The 280-kW off-grid pilot project is operating in Utah.

Marathon teamed up with Nodal Power on the project. Nodal Power was launched in November 2022 and produces energy from landfill gas in the southeastern United States and Texas. It raised $13 million in a seed round in August to operate two sites, one of which includes a data center.

A Nodal Power datacenter. Source: PRNewswire

Marathon said in a statement that the project is “part of a broader initiative being conducted by the Company to validate its ability to capture methane emitted from landfills, convert it into electricity, and then use that electricity to power Bitcoin miners.” Marathon CEO Fred Thiel said:

“Should the results of the pilot project meet our expectations, we look forward to expanding our footprint in this area and helping landfill operators and others meet their environmental targets.”

Bitcoin miners are actively seeking new green generating solutions. Genesis Digital Assets Limited, for example, set up an 8-MW facility in Sweden in August that uses hydropower.

Related: Bitcoin miners seek alternative energy sources to cut costs

Marathon cut the ribbon on a 200-MW immersion-cooled facility in Abu Dhabi’s sustainable Masdar City in late October. It released a report that month that found crypto mining at landfills is practical and has a number of advantages for miners and landfill owners, as well as the environment. According to the United Nations, methane is far more damaging to the environment than carbon dioxide.

Marathon reported second-quarter earnings this year fell short of expectations, despite the fact that it mined a record 2,926 Bitcoin in the quarter. Its Q2 revenue increased 228% year-on-year to $132.8 million.

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ProShares announces launch of short Ether-linked ETF

ProShares’s new Short Ether Strategy ETF is set to start trading on the NYSE Arca under the ticker symbol SETH.

ProShares, a major issuer of exchange-traded funds (ETF), announced the launch of the short Ether-linked ETF on Nov. 2.

ProShares’s new Short Ether Strategy ETF is set to start trading on the New York Stock Exchange’s Arca under the ticker symbol SETH and is designed to provide investors with an opportunity to profit from the volatility of Ether’s (ETH) price.

Similar to other ProShares crypto-linked ETFs, SETH seeks to obtain exposure through Ether futures contracts, the announcement notes.

According to ProShares CEO Michael Sapir, SETH aims to address the challenge of acquiring short exposure to ETH, “which can be onerous and expensive.”

“With today’s launch of SETH, ProShares now offers investors opportunities to profit both on days when Ether increases and when it drops — all through the convenience of a traditional brokerage account,” the CEO noted.

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SETH joins ProShares’ series of other ETFs linked to cryptocurrencies like Bitcoin (BTC) and Ether. In October 2021, ProShares launched its Bitcoin Strategy ETF, one of the first Bitcoin-linked ETFs in the United States. The firm subsequently launched the Short Bitcoin Strategy ETF in June 2022, aimed at shorting Bitcoin following its drop below $20,000.

Other ProShares’ crypto ETFs include the ProShares Ether Strategy ETF, Bitcoin and Ether Market Cap Weight Strategy ETF and Bitcoin & Ether Equal Weight Strategy ETF.

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Sam Bankman-Fried “doubled down” by buying Binance’s stake in FTX — U.S. prosecutors

The prosecution is delivering its closing arguments at the Southern District Court of New York, where Sam Bankman-Fried’s trial has been taking place since Oct. 3.

Federal prosecutors claimed Sam "SBF" Bankman-Fried “doubled down” on the use of customers’ funds when he purchased Binance’s $2 billion stake in FTX in 2021. According to U.S. government attorneys, Bankman-Fried paid for the buyout with funds from FTX customers.

The prosecution is delivering its closing arguments on Nov. 1 at the Southern District Court of New York, where Bankman-Fried’s trial has been taking place since Oct. 3. Jurors in the case reportedly heard from ​​Assistant U.S. Attorney Nicolas Roos:

“The defendant had a choice: come clear or double down? He doubled down. Here's when he doubled down. He used customer money to buy back FTX’s stock from Binance. [...]. It cost $2 billion."

In 2019, Binance invested in FTX through a strategic partnership. Two years later, in 2021, Bankman-Fried sought to buy back FTX’s shares, paying its competitor $2.1 billion in Binance’s stablecoin (BUSD) and in FTX Token (FTT).

Additionally, prosecutors went through other payments and purchases allegedly made by FTX with customer funds, including millions of dollars in political donations, luxury real estate in the Bahamas, and venture capital investments.

“He spends on K5 - here is the payment document, signed by the defendant. Nishad Singh said it was a bad idea. The guy who ran K5 hung around with celebrities,” Roos said in reference to K5 Ventures, a venture capital fund focused on early-stage startups.

K5 entities received $700 million in investment from FTX in 2022. Alameda Research, FTX’s sister company, also invested $300 million in K5 Global. According to prosecutors, FTX’s customer deposits were the source of the funds. Roos continued:

"The defendant knows Alameda can’t repay the debt. Nishad sees the giant hole and freaks out. The defendant, not so much. He has come to terms with it. He wanted to use the money. He did use the money. He had the arrogance to think he’d get away with it."

Bankman-Fried’s defense has argued that FTX’s own funds — whose revenue swelled from $89 million in 2020 to $1.02 billion in 2021 — were used for venture investments, political contributions, and property purchases. According to his defense team, the $8 billion gap between FTX and Alameda Research was caused by a lack of risk management and trading mistakes by Alameda. 

Bankman-Fried faces seven counts of fraud and conspiracy to commit fraud, and could spend up to 115 years in prison if found guilty. The defense is expected to begin its closing arguments on Nov. 1, just before the jury renders its final verdict.

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‘That’s fraud,’ prosecutors say in closing arguments at Sam Bankman-Fried trial

The U.S. government delivered its closing arguments in New York in an effort to convince the jury that SBF is guilty of fraud and conspiracy to commit fraud.

Sam “SBF” Bankman-Fried’s trial has entered the final stages, with the prosecution delivering its closing arguments in the case on Nov. 1.

Closing arguments are the last opportunity for lawyers to convince the jury and judge that they should win the case. Prosecutors had previously estimated that their closing arguments would take up to four hours. Right afterward, Bankman-Fried’s defense will also present its closing arguments.

“That’s fraud. It’s stealing, plain and simple. Before FTX, there was Alameda,” Assistant United States Attorney Nicolas Roos reportedly told jurors, presenting one of the many charts the government used as evidence.

The former CEO of FTX is facing seven counts of fraud and conspiracy to commit fraud. Bankman-Fried could serve up to 115 years in prison if convicted. A jury of 12 will decide his fate in the coming days.

As part of the prosecution’s case against Bankman-Fried, nearly 20 witnesses testified that he deceived investors, customers and partners of FTX while commingling funds with Alameda Research.

“The defendant set up two separate ways. If you believe even one of the three cooperators, the defendant is guilty. An unlimited line of credit just means unlimited money from FTX. Ellison told you, he directed us. Gary Wang said the same.”

The defense, on the other hand, tried to present Bankman-Fried as an entrepreneur who made “terrible mistakes” in good faith, denying accusations he directed his inner circle to make political contributions and venture investments and purchase luxury real estate with customer funds.

Bankman-Fried’s defense faces a tough challenge in persuading jurors that he is innocent of the charges, as the government presented extensive evidence, including testimony from officials and law enforcement agents involved in the case. Roos continued

“The defendant marketed the liquidation engine, saying FTX was safe. He told Congress, collateral must be placed on the platform itself, not just pledged. But the secret rules allowed Alameda to borrow billions without any risk of being liquidated.”

Bankman-Fried’s trial started on Oct. 3 in the Southern District Court of Manhattan and has been ongoing since. You can follow Cointelegraph's coverage of the trial here.

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UK AI Safety Summit begins with global leaders in attendance, remarks from China and Musk

The U.K. AI Safety Summit concluded its first day with a common declaration, the U.S. announcing an AI safety institute, China willing to communicate on AI safety and comments from Elon Musk.

The United Kingdom’s global summit on artificial intelligence (AI) safety, “AI Safety Summit” began on Nov. 1 and will carry on through Nov. 2 with government officials and leading AI companies from the world in attendance, including from the United States and China. 

U.K. Prime Minister Rishi Sunak is hosting the event, which is taking place nearly 55 miles north of London in Bletchley Park. It comes at the end of a year of rapid advancements in the widespread use and accessibility of AI models following the emergence of OpenAI’s popular AI chatbot ChatGPT.

Who is in attendance?

The AI Safety Summit expects to have around 100 guests in attendance. This includes leaders of many of the world’s prominent AI companies such as Microsoft president Brad Smith, OpenAI CEO Sam Altman, Google and DeepMind CEO Demis Hassabis, Meta’s AI chief Yann LeCunn and its president of global affairs Nick Clegg and billionaire Elon Musk.

On a governmental level, global leaders from around 27 countries are expected to be in attendance including the U.S. Vice President Kamala Harris, the president of the European Commission Ursula von der Leyen and the secretary-general of the United Nations Antonio Guterres.

The U.K. also extended the invitation to China, which has been a major competitor to Western governments and companies in AI development. Chinese Vice Minister of Science and Technology, Wu Zhaohui will be attending, along with companies Alibaba and Tencent.

Initial summit proceedings

The two-day summit’s primary aim is to create dialogue and cooperation between its dynamic group of international attendees to shape the future of AI, with a focus on “frontier AI models.” These AI models are defined as highly capable, multipurpose AI models that equal or surpass the capabilities of current models available.

The first day included several roundtable discussions on risks to global safety and integrating frontier AI into society. There was also an “AI for good” discussion on the opportunities presented by AI to transform education.

The 'Bletchley Declaration' and the U.S.’s AI Safety Institute

During the summit, Britain published the "Bletchley Declaration” which serves as an agreement to boost global efforts of cooperation in AI safety. The signatories of said declaration included 28 countries, including the U.S. and China, along with the European Union.

In a separate statement on the declaration, the U.K. government said:

"The Declaration fulfills key summit objectives in establishing shared agreement and responsibility on the risks, opportunities and a forward process for international collaboration on frontier AI safety and research, particularly through greater scientific collaboration.”

Other countries endorsing the statement include Brazil, France, India, Ireland, Japan, Kenya, Saudi Arabia, Nigeria and the United Arab Emirates.

Related: Biden administration issues executive order for new AI safety standards

In addition, the U.S. Secretary of Commerce Gina Raimondo said that it plans to create its own AI Safety Institute, focusing on the risks of frontier models.

Raimondo said she will “certainly” be calling on many in the audience who are “in academia and the industry” to participate in the initiative. She also suggested a formal partnership with the U.K.’s Safety Institute.

Musk calls summit a “referee" 

Elon Musk, the owner of social media platform X and CEO of both SpaceX and Tesla, has been a prominent voice in the AI space. He has already participated in talks with global regulators on the subject. 

At the U.K’s AI Safety Summit on Wednesday, he said the summit wanted to create a “"third-party referee" oversee AI development and warn of any concerns.

According to a Reuters report Musk is quoted saying:

"What we're really aiming for here is to establish a framework for insight so that there's at least a third-party referee, an independent referee, that can observe what leading AI companies are doing and at least sound the alarm if they have concerns.”

He also said before there is “oversight” there must be “insight” inference to global leaders making any mandates. “I think there's a lot of concern among people in the AI field that the government will sort of jump the gun on rules, before knowing what to do," Musk said.

Related: UN launches international effort to tackle AI governance challenges

China says it's ready to bolster communications

Also in attendance was China’s Vice Minister of Science and Technology, Wu Zhaohui who emphasized that everyone has the right to develop and deploy AI.

"We uphold the principles of mutual respect, equality and mutual benefits. Countries regardless of their size and scale have equal rights to develop and use AI," he said.

"We call for global cooperation to share AI knowledge and make AI technologies available to the public on open source terms."

He said that China is “willing to enhance our dialogue and communication in AI safety” with “all sides.” These remarks come as China and many Western countries, particularly the U.S., have been racing to create the most advanced technology on the market. 

The summit will continue for its final day on Nov. 2 with remarks from the U.K. Prime Minister and U.K. Technology Secretary Michelle Donelan.

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GAO finds controversial SEC guidance is subject to congressional oversight

The SEC’s Staff Accounting Bulletin 121 has been the target of much criticism in the crypto community.

United States Senator Cynthia Lummis has scored another one for crypto with a Government Accountability Office (GAO) decision issued on Oct. 31. The GAO found that Securities and Exchange Commission (SEC) Staff Accounting Bulletin 121 should be subject to congressional review. That bulletin, issued in March 2022, has been a source of ire for many pro-crypto lawmakers.

The GAO was acting on a letter sent by Lummis to the U.S. Comptroller General in August 2022. It considered whether the bulletin was a rule subject to the Congressional Review Act (CRA). Under the CRA, a report on an agency rule must be submitted to the comptroller general and both chambers of Congress, with a procedure for Congress to disapprove the rule. Using the definition of a rule found in the Administrative Procedures Act (APA), the GAO found the SEC bulletin to be subject to the CRA. The GAO said:

“It is reasonable to believe that companies may change their behavior to comply with the staff interpretations found in the Bulletin […] The Bulletin is also of future effect and was designed to interpret and prescribe policy. Accordingly, we conclude that the Bulletin meets the definition of rule under APA.”

The bulletin “expresses the views of the staff regarding the accounting for obligations to safeguard crypto-assets an entity holds for platform users,” according to the SEC. It said, “The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission’s official approval. They represent staff interpretations and practices.”

The bulletin used hypothetical situations to describe what the SEC considered best practices to safeguard crypto-assets held by platforms for their users. Coinbase and PayPal are examples of such platforms. It advises platforms to list their users’ assets on their books as liabilities and assets at their fair value at initial recognition. This represented a sharp turn in accounting practice as custodied assets were not previously recorded on balance sheets.

Related: US House Financial Services Committee tells SEC it doesn’t like custody proposal

The bulletin was quickly met with objections from several sides. SEC commissioner Hester Peirce released a critical response within days. Peirce stated that the accounting procedure described in the bulletin was a response to risk that the SEC itself was partially the source of.

Five Republican senators, including Lummis, wrote to SEC chairman Gary Gensler in June 2022 to express their disapproval of the bulletin’s “backdoor regulation.” Gensler was further lectured on the bulletin by Representative Mike Flood when he appeared before the House Financial Services Committee this September.

GAO findings are recommendations only. However, the agency notes, “Clearly, agencies are taking our recommendations.”

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