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Mike Novogratz says he's shocked US regulators are cracking down on crypto and not AI: "The government's got it completely upside-down"

Zahra Tayeb   

Mike Novogratz says he's shocked US regulators are cracking down on crypto and not AI: "The government's got it completely upside-down"
  • Mike Novogratz says he's shocked US regulators are cracking down on crypto, but turning a blind eye to AI.
  • "It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period," he said.

Mike Novogratz says he's shocked the US regulators are cracking down on crypto and not artificial intelligence.

A sudden frenzy in artificial-intelligence technology kicked off 2023, largely due to the popularity of OpenAI's language tool, ChatGPT, which was launched in November.

"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 Galaxy Digital CEO said on a fourth-quarter conference call on Tuesday.

The crypto world has come under intense scrutiny since the collapse of digital-asset exchange FTX. Regulators have stepped up their crackdown on several companies, including the world's largest crypto exchange Binance. The company is facing a raft of US regulatory probes, and just got sued by the Commodities Futures and Trading Commission for allegedly breaching US financial laws.

But authorities should instead turn their attention to AI, according to Novogratz, who thinks the technology poses big problems. AI threatens to trigger a "deep fakes" identity crisis, according to him.

Deepfakes use deep learning artificial intelligence to replace the likeness of one person with another in video and other digital media.

"In lots of ways, one of the best-use cases for crypto is going to be identity around AI, because pretty soon you're going to get a fake Mike Novogratz, hopefully with hair [...] how do you prove identity in a world like that?" he said.

"It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period," Novogratz said.

AI, however has been a heavily discussed topic since the debut of ChatGPT. Hype around the chatbot has lifted artificial intelligence stocks including Nvidia, which has surged about 83% since the start of 2023. While the chatbot has impressed crowds with its ability to spew out dating and stock investing advice, it's also raised concerns about the risks it poses.

The Federal Trade Commission (FTC) is skeptical about the AI revolution since it could introduce online bias, discrimination, and other consumer harms. Meanwhile, a British spy agency warned that AI chatbots like ChatGPT pose a security threat because sensitive queries stored in chatbot providers could be hacked or leaked.


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