A group of Democratic members of the U.S. House of Representatives sent a letter to SEC Chair Paul Atkins on Tuesday, demanding details on how the agency oversees AI-driven trading tools and whether additional legal authority is needed. The letter, led by Representatives Bill Foster and Brad Sherman, was signed by six other Democrats.
Letter Highlights: AI Trading Agents Operate in Regulatory Gray Zone
Lawmakers warned that platforms offering AI trading agents to retail investors raise serious concerns about investor protection, broker-dealer responsibilities, market integrity, and AI developer accountability. They noted that while such trading may initially be limited to stocks, indications point to rapid expansion into options, cryptocurrencies, event contracts, and futures. Many AI agents have operated largely outside the securities regulatory framework, the letter said, despite making consequential investment decisions on behalf of retail investors.
The lawmakers also questioned legal liability among brokers, AI developers, and users. Many AI agent disclaimers state that brokerage platforms cannot guarantee the accuracy or suitability of AI-generated recommendations and cannot fully control, monitor, or audit agent behavior. These disclaimers create uncertainty about regulatory treatment and legal responsibility, the letter stated.
The SEC was asked to respond in writing by July 31 on safeguards and analyses conducted on AI agents, when such systems should register with the regulator, how extensively the SEC has consulted trading platforms, and whether Congress needs to grant additional authority to address emerging risks.
Coinbase Launches AI Agent Platform for Crypto
The request comes as AI agents continue expanding into crypto trading and digital payments. Earlier this month, Coinbase introduced Coinbase for Agents, enabling large language models like ChatGPT and Claude to access user-authorized Coinbase accounts. The system lets AI agents execute crypto trades, manage portfolios, monitor markets, rebalance holdings, and purchase digital services via Coinbase's x402 machine payment protocol. Coinbase Advisor, registered with the SEC and CFTC, is integrated into the platform to provide investment guidance within agent workflows. Support for stocks and prediction markets will follow, Coinbase said.
Legal Framework Catches Up: New Protocol for Autonomous Transactions
On the same day as the lawmakers' letter, the American Arbitration Association and Integra Ledger introduced the Legal Context Protocol, an open standard to record transaction terms, consent, governing law, and dispute resolution for autonomous AI transactions. The protocol addresses legal recordkeeping rather than payments and works alongside existing machine payment systems like x402. Founding contributors include Google, IBM, Circle, Hedera, Cardano, Aptos Foundation, Ava Labs, Stellar Development Foundation, Wayfair, and others. Integra Ledger CEO David Fisher said payment infrastructure for AI agents is actively being built while the legal framework has yet to catch up. The protocol answers questions about what parties agreed to, governing terms, and dispute resolution. As AI agents take on more financial decisions for retail users, lawmakers seek clarity on how existing securities rules apply.