According to Galaxy Digital’s CEO, Mike Novogratz, the regulatory attention that cryptocurrencies have been receiving is surprising, given the potential risks associated with other emerging technologies such as artificial intelligence.
Novogratz believes that AI could lead to a deep fake-like identity crisis, which could have significant consequences for society.
The Concerns are Not Unfounded
Novogratz’s concerns are not unfounded, as the rapid advancement of AI has made it increasingly difficult to distinguish between real and fake information, and to identify the source of the information.
The proliferation of deepfakes, or digitally altered videos, has made it more challenging to verify the authenticity of visual media.
In contrast, cryptocurrencies, although still largely unregulated, have not yet posed the same level of threat to society.
While cryptocurrencies may require oversight to prevent fraud and protect investors, it is important not to overlook the potential risks associated with other technological advancements that could have far-reaching implications for society.
During Galaxy Digital’s Q4 conference call recently, CEO Mike Novogratz expressed his surprise that the US government is placing such a heavy emphasis on regulating crypto while seemingly ignoring the potential risks associated with AI.
Novogratz feels that the government has its priorities mixed up, given that he believes that AI has the potential to trigger a deep fake identity crisis.
Novogratz’s concerns are not unfounded. AI technology has advanced rapidly in recent years, making it easier to create deepfake videos that can deceive even the most sophisticated algorithms.
Despite this, there has been little discussion of AI regulation at the government level, and this is something that Novogratz believes needs to change.
By prioritizing regulation and oversight of AI, governments can help to mitigate the potential risks associated with this powerful technology.
Could Crypto Combat the Risks Posed by AI?
Mike Novogratz believes that one of the most significant use cases for cryptocurrencies and blockchain technology will be in the realm of identity verification, particularly in combating the risks posed by deepfake technology generated by AI.
The CEO foresees a future in which fake identities can be easily created, presenting a significant challenge for security and fraud prevention. He suggests that blockchain applications have the potential to play a significant role in addressing these issues.
Novogratz recognizes the importance of balancing regulatory oversight with innovation and growth, and he believes that it would be unwise to stifle the crypto industry because of concerns about individual actors.
The recent discussions held by the US Commodity Futures Trading Commission about the impact of AI on various industries suggest that policymakers are beginning to take the potential risks associated with AI more seriously.
However, Novogratz’s concerns about the lack of attention paid to AI regulation in comparison to crypto regulation highlight the need for a more proactive approach to emerging technology regulation.
By recognizing the potential risks and opportunities presented by these technologies, policymakers can help to ensure that they are used for the betterment of society.
The CEO stated that the crypto industry has made a remarkable recovery in 2023, thanks to seller exhaustion, along with the reopening of China.
He believes that much of the selling that needed to happen has already occurred, due to the significant negative news surrounding the industry, leading to panic and nervousness among investors.
As a result, Novogratz believes that many of the weaker players have left the market, allowing for a more sustainable recovery.
Furthermore, Novogratz has observed an increase in crypto activity coming out of China, following the Chinese government’s less stringent regulatory approach towards tech companies, including those involved in crypto.
Novogratz remains optimistic about the future of the crypto industry, particularly as more institutional investors and mainstream companies begin to embrace the technology.
He believes that the industry will continue to evolve rapidly, and that crypto and blockchain technology will play an increasingly important role in the global economy in the years to come.