A group of Democratic members of the U.S. House of Representatives sent a letter to SEC Chair Paul Atkins on Tuesday seeking details about how the agency oversees AI-driven trading tools and whether current securities laws are sufficient to address the technology. According to reports from The Block, the letter was led by Bill Foster, the top Democrat on the House Financial Services Financial Institutions Subcommittee, and Brad Sherman, the top Democrat on the Capital Markets Subcommittee. The inquiry comes as Coinbase and other companies continue to roll out AI agents capable of executing trades, managing portfolios, and making digital payments. The lawmakers have now escalated their concerns to 13 specific questions about investor protection and market integrity.
The lawmakers warned that AI powered trading tools could expand into cryptocurrencies, options, futures, and event contracts while operating with limited regulatory oversight. As reported by The Block, the letter stated that platforms offering AI trading agents to retail investors "raises serious questions for investor protection, broker-dealer responsibilities, market integrity, and the accountability of AI developers." The lawmakers argued that many AI trading agents have "operated largely outside the securities regulatory framework," despite making "consequential investment decisions on behalf of retail investors." They specifically flagged the threat of correlated trades, noting that agents trained on similar data could herd, amplifying volatility and wider market stress.
The lawmakers questioned the legal responsibility of brokers and AI developers, noting that disclosures accompanying many AI agents state that brokerage platforms cannot guarantee the accuracy or suitability of AI-generated recommendations and cannot fully control, monitor, or audit agent behavior. According to The Block, the lawmakers wrote that such disclaimers "raise urgent questions about the regulatory treatment of agentic trading tools and create uncertainty regarding legal responsibility among brokers, AI developers and retail investors." They pressed Atkins to define the legal responsibilities of broker-dealers, AI developers, and the agents themselves, asking whether the current securities law can govern agentic trading or whether Congress must step in.
The letter asks the SEC to provide written responses by July 31 on several issues, including what safeguards or analyses the agency has conducted on AI agents, when such systems should register with the regulator, how extensively the SEC has consulted with trading platforms, and whether Congress needs to grant the agency additional authority to address emerging risks. As reported by The Block, Representatives Stephen Lynch, Jim Himes, Sean Casten, Rashida Tlaib, Brittany Pettersen, and Sylvia Garcia also signed the letter. The Democrats specifically asked "Under what circumstances would an AI agent or its developer be required to register as a broker, dealer, investment adviser, or associated person under the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, or other applicable securities laws?"
The request comes as AI agents continue to expand into cryptocurrency trading and digital payments. According to The Block, Coinbase introduced Coinbase for Agents earlier this month, allowing large language models such as ChatGPT and Claude to access user-authorized Coinbase accounts. The system enables AI agents to execute cryptocurrency trades, manage portfolios, monitor markets, rebalance holdings under predefined rules, and purchase digital services through Coinbase's x402 machine payments protocol. Additionally, Coinbase integrated Coinbase Advisor into the platform, describing it as an SEC and CFTC-registered financial adviser that can provide investment guidance within agent workflows. Robinhood launched Agentic Trading on May 27, allowing AI agents to trade equities on behalf of its customers, while Public rolled out a similar agentic brokerage earlier in 2026.
