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House Democrats have asked SEC Chair Paul Atkins to explain how the agency is overseeing AI tools that can advise retail investors or execute trades through customer accounts.
The June 23 letter targets agentic trading, where AI tools may be allowed to recommend, route or execute trades through brokerage and crypto accounts. The lawmakers want written answers by July 31.
Democrats Ask Who is Liable for AI Trades
The letter was led by Bill Foster and Brad Sherman, with Stephen Lynch, Jim Himes, Sean Casten, Rashida Tlaib and Sylvia Garcia also signing. It says retail brokerage platforms have begun letting users give AI agents the ability to automate investment decisions and trade stocks.
The lawmakers said the model could move beyond equities into options, cryptocurrency, event contracts and futures. That would put AI tools closer to markets already drawing attention from securities, commodities and prediction market regulators.
Letter Asks About Registration and Trade Limits
The Democrats asked whether the SEC has consulted with brokerages or AI developers before agentic trading launches. They also asked whether any platform or developer received formal approval, no-action relief, exemptive relief or interpretive guidance.
Several questions focus on whether AI agents or their developers may need to register as brokers, dealers, investment advisers or associated persons. The lawmakers also asked about funding limits, position limits, order-size limits, trade approvals, transaction logs, dispute processes and limits on access to customer data.
Coinbase Adviser Brings Crypto Into Debate
The request follows a wave of AI trading and adviser products aimed at retail users. Coinbase this month introduced Coinbase Advisor, which it describes as an AI-powered, SEC-registered investment adviser inside its app.
Coinbase also launched tools that let AI agents trade and make payments through Coinbase accounts. The company says its adviser gives recommendations and guidance, while user-facing disclosures say AI outputs can be incomplete or inaccurate.
SEC Withdrew Earlier AI Analytics Proposal
The SEC has already opened this fight once. In 2023, it proposed rules for broker-dealers and investment advisers using predictive data analytics, including AI-related tools that could create conflicts of interest in investor interactions.
The commission later withdrew that proposal, leaving brokerages, crypto platforms and AI developers with fewer direct rules for agent-driven trading.
Atkins Faces July 31 Response Deadline
The July 31 deadline is the next public test of how Atkins’ SEC wants to handle AI-driven advice and trade execution. His response could clarify whether the agency sees AI trading agents as a broker, adviser, developer-liability or platform-supervision issue.
The answer will matter for crypto firms building trading agents, brokerages adding automation and retail investors who may not know where platform responsibility ends.
