Murphy & McGonigle partner Timothy Peterson comments in CoinDesk on trends in the ICO regulatory and enforcement environment.
For the sixth year in a row, U.S. News & World Report and Best Lawyers selected Murphy & McGonigle as a National Tier 1 Law Firm. This year, we were honored in Securities Regulation, Securities Litigation, and Corporate Law. Only 25 firms received National Tier 1 recognition in all three areas. We are the youngest and smallest firm among those 25 listed, by far.
A slew of articles has appeared recently about the growing use of artificial intelligence (“AI”) and neural networks for securities trading. Most of these articles conflate basic algorithm refinement with deep learning and neural networks. As I noted in an article I wrote last December, I am confident that some forms of deep learning are being used by a few hedge funds and proprietary traders, and that such use will grow quickly over time. The notion, however, that it is taking hold on a widespread basis seems grounded on a misunderstanding of the nature of deep learning.
Murphy & McGonigle partner Timothy Peterson comments in CoinDesk on a class action securities lawsuit following an ICO. The lawsuit alleges cryptocurrency failed to register as a security.
Deep learning is another technological advance that has important implications for securities regulation. In simple terms, deep learning is a form of machine learning that involves learning data representations and patterns using simulated neural networks. Deep learning requires access to a very large amount of data and immense computing power. I expect deep learning to be used by certain sophisticated traders, such as hedge funds and proprietary trading firms.
Two developments in technology, blockchain and deep learning, have implications for securities trading regulation. The two technologies are different in scope and purpose and will raise different issues for securities regulators. Both demonstrate how technological advances in the trading area can outpace current rules and regulations and cause regulators to rethink how to handle so-called “disruptive” technologies without impeding new structures and ideas.