▶ 0:23:52action the chair is authorized to declare recess at any time. We welcome everyone to today's hearing on artificial intelligence and criminal exploitation. I now recognize the gentlewoman from Florida, Ms. Lee, to lead us in the Pledge of Allegiance.
▶ 0:24:23Thank you. I now recognize myself for an opening I appreciate everyone being here today, our witnesses and those in the audience. This is an important hearing which focuses on artificial intelligence and how it is being exploited by criminals. The conceptual roots of AI can be traced to British mathematician Alan Turing when the 1930s theorized about machine being capable of performing any computable task.
▶ 0:24:51Today, AI is best understood as a branch of computer science that leverages large-scale data processing, algorithmic modeling, and modern hardware to enable machines to perform tasks typically requiring human cognition. Unfortunately, like most technical innovation, the criminal element has begun to use AI to enhance their illicit AI enables threats AI-enabled threats continue to evolve as bad actors use AI technology in a wide spectrum of criminal enterprises.
▶ 0:25:21From deepfake scams and synthetic identity fraud to financial crimes and child sexual abuse material CSAM, the landscape continues to evolve at a rapid pace as AI provides users with enhanced capabilities. AI-based or AI-driven threats and schemes can cost billions, excuse me, businesses millions of dollars a year including both prevention and falling prey to them. In one case, fraudsters used AI to clone of a CEO's voice and authorize a wire transfer.
▶ 0:25:49Among corporations that experienced a rise in deepfake incidents, 75% of deepfakes impersonated a CEO or another C-suite executive. Generative AI enables the criminal exploitation of victims' emotional vulnerabilities through tactics such as sextortion, pig butchering scams, fishing, and elder fraud. Senior citizens are increasingly targeted through voice phishing scams where an AI-generated replica of a grandchild or military officer claims to claims to need urgent funds.
▶ 0:26:19In one case, a Colorado mother received a call from what sounded like her daughter pleading for help. The voice was AI-generated, cloned from a short online clip, and used to demand ransom. The voice was indiscernible to the mother who wired $1,000 to scammers in AI is also fueling a rise in sextortion and synthetic CSAM. New AI tools can generate highly realistic but entirely fabricated explicit images often used to extort minors or damage reputations.
▶ 0:26:49Some sextortion scams exploit the trust associated with platforms like Apple's iMessage by impersonating classmates or romantic interest via recognizable blue bubble interfaces. Criminals now deploy apps like Mua to fabricate child abuse images at scale. Stanford University researchers have uncovered evidence that generative models were trained on real exploitative Terrorist groups now utilize AI to target, recruit, and indoctrinate vulnerable individuals.
▶ 0:27:18Generative AI provides a degree of separation, allowing actual terrorists to maintain anonymity in their public-facing recruiting practices. Generative AI also allows terrorists to produce propaganda, fake news stories, and emotionally resonant messages tailored to specific psychological Reports of generative artificial intelligence-enabled scams between May of 2024 and May of 2025 rose by 456%.
▶ 0:27:46The use of exploitative generative AI allows criminals to produce human-like text, code, images, and videos, allowing criminals to use the technology for further criminal activity such as creating more realistic fishing lures or generating deepfakes for extortion. On average, phishing attacks cost $4.9 million per breach.
▶ 0:28:06On the other hand, AI is increasingly integrated into police investigations, offering new tools and capabilities for law enforcement agencies amid the backdrop of rapidly expanding digital data sources and increasing demands on law enforcement agencies. AI provides a more adaptable and comprehensive approach to solving crimes com- compared to traditional methods, leveraging data analytics, machine learning, and pattern recognition to enhance investigations and assist with administrative tasks.
▶ 0:28:35This is also potentially a problem as well as we seek to balance uh curbing AI with our civil rights. AI can also help pro- large volumes of data, identify patterns, and generate actionable insights, and in turn these applications can improve efficiency, accuracy, and resource allocation within investigative However, to fully benefit from AI applications, law enforcement entities need reliable data, human oversight, and while also tackling
▶ 0:29:06issues related to the privacy, bias, and ethical considerations. Addressing the continued misuse of AI will require very varied approach while also public awareness about the risk associated with AI-generated content. Law enforcement agencies must engage openly with community stakeholders, legal experts, and the public to communicate the intended uses, benefits, and limitations of AI technologies. A collaborative effort to both prevent the misuse of AI while encouraging lawful application is required to effectively navigate this evolving landscape.
▶ 0:29:37I am excited for today's hearing. I think this is the first of its kind. I believe it will be only the first of its kind as we consider AI and continued expansion of influence in our and I'm looking for a a very substantive discussion that we're I anticipate a substantive discussion that we're going to have today, and with that, I yield back and recognize now our ranking member, Ms. McBath, for her opening statement.
▶ 0:30:06Well, thank you so much, Mr. Chairman, and thank you to our witnesses today. Thank you so much for taking moments out of your day to come before us. Uh Thank you for convening this hearing to discuss AI-enabled crime, efforts to detect and combat such crime, and how law enforcement deploys AI tools. Like so many new technologies, AI is not inherently good or bad.
▶ 0:30:32AI-enabled tools can find patterns, sort through vast amounts of and may even help law enforcement solve their crimes. But, in the wrong hands, the same tools can be used to commit financial fraud, branch national security, or actually breach national security systems, and to harm our children.
▶ 0:30:56When used by law enforcement, this technology has the potential to empower our investigators, while also carrying the risk of serious errors with life-changing consequences.
▶ 0:31:10That is why it is critical that we thoughtfully and put appropriate guardrails in place so that everyone in our criminal justice system is um that is using AI-enabled tools, they're using them responsibly, not to the detriment of law-abiding members of our communities. We've already seen what can go wrong when those safeguards are missing.
▶ 0:31:37A woman and her family experienced the dangers of using AI-enabled facial recognition technology. Detroit police used a facial recognition in an attempt to identify a carjacking suspect using an image from a surveillance camera. The tool matched the surveillance image with a picture of Porcha Woodruff, a nursing school student.
▶ 0:32:05One morning, as Ms. Woodruff was getting in getting her two children ready for police knocked on her door, and they told her that she was under arrest for She knew right away there must be some kind of mistake, and she gestured at her body as she spoke to law enforcement to point out the obvious, she hoped to law enforcement, that she was 8 months pregnant.
▶ 0:32:34Though the police had not been looking for a visibly pregnant woman, they still handcuffed Ms. Woodruff, took her away from her crying children, held her for 11 hours, searched her phone, and they charged After her release, she went straight to the hospital and was treated for dehydration. The charges were dismissed a month later.
▶ 0:33:02This case is especially troubling because facial recognition tools have been shown to perform worse on black individuals, increasing the risk of misidentification and contributing to AI is only as good as the data it is trained on. And when that data is it exacerbates racial disparities long embedded in our criminal justice system.
▶ 0:33:33An inaccurate inaccurate tool is dangerous for every single one of us. Not one of us is immune to these and in due part to cases like this one, the city of Detroit has adopted new rules to direct the use of facial recognition technology within its police And they're simply not alone.
▶ 0:33:57Many cities and states have put sensible guardrails in place to limit potentially harmful uses of AI. That's why it was alarming when some of my Republican colleagues recently attempted to pass a moratorium on state and local AI regulations in the big ugly bill, a move that generated bipartisan opposition so much that 40 states attorneys general and 17 Republican
▶ 0:34:29including the governor of my state, Georgia, wrote letters to the Senate in opposition to the proposed moratorium. The governors warned that, and I'm quoting them, "People will be at risk until basic rules ensuring safety and fair fairness can go into effect." End As you'll see behind me, Sarah Huckabee Sanders, the Republican governor of Arkansas and former press secretary to President Trump,
▶ 0:35:00took to Twitter to quote, "I stand with a majority of GOP governors against stripping states of the right to protect our people from the worst abuses of AI." "The US must win the fight against China on AI and everything else. But, we won't if we sacrifice the health, safety, and prosperity of our people." End quote.
▶ 0:35:26While this most recent proposal was ultimately stripped from the bill by a 99 to 1 vote of the Senate, the Republican chair of the House Energy and Commerce Committee has already vowed to continue to pursue a moratorium, even while acknowledging that federal regulations on AI are still light-years I stand with those seeking to protect the health
▶ 0:35:57and the safety and civil rights of our communities from the abuses of AI, and I hope that we can come together and follow the lead of the states to explore what those guardrails should look like and put them in place. I look forward to learning more from our experts here today. I hear Hearing from you is going to be extremely critical for us on this very important issue. But, before I yield, uh Mr.
▶ 0:36:26Chairman, I ask unanimous consent to enter into the record two letters. The first, a letter from 17 Republican governors in opposition to a moratorium on state and local regulation on AI. And the second, a letter from 40 state attorneys general, both Republican and Democrats, in opposition to a moratorium on state and local regulation of AI. Without objection. I yield. The gentle lady yields. Um without objection, all of the opening statements will be included in the record. We'll now introduce today's witnesses.
▶ 0:36:56And we're very grateful for our witnesses. Dr. Andrew Bone Bown, okay. Dr. Bown is a professorial lecturer in law at the George Washington University Law School, where he teaches courses on artificial intelligence law and policy. He has served in the United States Air Force Judge Advocate General Corps since 2010 and previously served as the Chief Legal Counsel of the Department of the Air Force Artificial Intelligence Accelerator at the Massachusetts Institute of Technology.
▶ 0:37:25Thank you, Doctor, for being with us today. Mrs. Zara Perum Perumal? Perumal, there you go. Is the co-founder and Chief Technology Officer of Overwatch Data, an artificial intelligence company focused on threat intelligence and cyber crime tactics on the dark web. Prior to founding Overwatch Data, she worked at Google on matters involving machine learning and cyber security cyber security threats. Thank you for being with us today, Mrs. Mr.
▶ 0:37:51Ari Redbord is the Global Head of Policy at TRM Labs, a company focused on preventing illicit financial activity. He previously served as senior advisor to the Deputy Sec- Secretary and Under Secretary for Terrorism and Financial Intelligence at the US Treasury. Prior to Treasury, he was an Assistant US Attorney where he focused on terrorism, espionage, financial, child exploitation, and human trafficking Thank you, Mr. Redbord, for being with us today. Uh Mr.
▶ 0:38:19Kody Wilson is a Senior Policy counsel in the ACLU's National Political Advocacy Department, where his work focuses on surveillance, privacy, and technology. Specifically, he works on matters related to artificial intelligence, privacy, children's privacy, and civic uses of data. Thanks, Mr. Vinsky, for being with us today. We We appreciate all of you being here, and now ask uh that you please rise so you can be sworn in.
▶ 0:38:47Would you please raise uh your right hand. Do you swear or affirm under penalty of perjury that the testimony you are about to give is true and correct to the best of your knowledge, information, and belief, so help you God? Uh let the record reflect the witnesses have answered in the affirmative, and thank you. You may be seated. Please know that your written testimony will be entered into the record in its entirety.
▶ 0:39:13Accordingly, we ask that you your testimony be summarized in 5 And what What's going to happen I just I just so you know is when I get about 15 seconds before the end, you'll start hearing this. Something like that. And then at the at the magic moment, I'll I'll start getting a little bit louder, but uh we're trying to help you wrap up on time so we can work this out, but we're so grateful that you're here. Mr.
▶ 0:39:39Bound, you may begin with your 5 Thank you, Mr. Chairman, Ricky member, and distinguished members of this uh Uh thank you for the opportunity to testify on the intersection of artificial intelligence and criminal My name is Andrew Bound. I serve as a professional uh lecturer at the uh George Washington University Law School, uh where I teach courses on AI law and policy.
▶ 0:40:02I have served in the United States Air Force Judge Advocate General's Corps uh since 2010, including assignments as a prosecutor, uh a staff judge advocate, and general counsel of a uh Air Force installation, uh and as you heard, a a chief legal counsel for uh the Department of the Air Force's AI accelerator at MIT. I do appear today in my personal capacity. Views I present are my own and do not necessarily reflect those of the Department of Defense, the Department of the Air Force, or the Judge Advocate General's Corps.
▶ 0:40:33AI is both a catalyzing and transformative technology enabler. It accelerates traditional processes, but also creates entirely new ones. When the task AI is used for is criminal or harmful, the nature of AI becomes a threat AI systems now automate decisions, model environments, and infer actions with unprecedented speed and scale. While they are designed to benefit society, their dual-use nature means they could also facilitate exploitation, fraud, and abuse.
▶ 0:41:04Even AI systems designed with legitimate use in mind can create harm if not carefully designed and deployed with safety, ethics, and accountability built Today, I'd like to briefly highlight how AI enables criminal activity, the gaps in current criminal law, and proactive steps Congress might take. First, how AI enables criminal activity. I'm seeing really three categories of AI developments that are of particular concern in this area.
▶ 0:41:31Computer vision, generative adversarial networks or GANs, and large language models or LLMs. Computer vision systems, which interpret visual data, are used to automate surveillance, identify targets, and even harvest personal data from breached documents to support identity theft and fraud. What enables real-time threat detection for public safety can be repurposed to stalk or blackmail individuals with chilling efficiency. GANs are capable of generating synthetic images, videos, and audio. Better known in the public discourse is deepfakes.
▶ 0:42:01These tools allow the impersonation of public officials and private citizens Multiple watchdogs and law enforcement agencies that have conducted longitudinal analysis on AI-generated child sexual abuse material or CSAM, reported rapid rises in the number of generated images shared online.
▶ 0:42:19Perhaps more concerning is that the increased capabilities and sophistication of generative AI models enable them to produce very realistic Generative AI tools are also used for sextortion, grooming, and emotional coercion, often targeting children. Large language models, like those powering chatbots, are revolutionizing fishing, fraud, and social engineering, as well as misinformation.
▶ 0:42:43They engage victims in extended realistic conversations, target elderly people and vulnerable people in scams, or overwhelming financial institutions with thousands of tailored loan applications. They're also used to generate malicious code, making cybercrime accessible to individuals with no technical background. In short, deepfakes, AI generated CSAM, and automated fraud are not theoretical threats. They're real, growing, and causing harm now.
▶ 0:43:12The barrier to entry to using AI to perpetrate or perpetrate is low. Anyone with a few seconds of your voice or image can create convincing synthetic content without coding or expensive The tools are cheap, accessible, and often unregulated. Tragically, gaps in current federal criminal law allow bad actors to use AI to profit at the expense of others, prey upon the vulnerable, or create mistrust with impunity.
▶ 0:43:37While there are statutes for wire fraud child sexual abuse material, they do apply to many of the AI-enabled crimes, there are several significant gaps. More alarming still are emerging threats such as autonomous criminal activity, cross-border AI-enabled crime, and algorithmic market manipulation, for which criminal liability is unclear or altogether absent.
▶ 0:44:03There are a variety of strategies that this subcommittee, as well as Congress, can consider, including criminal law They could define new offenses for malicious use of AI, particularly for deep fakes and AI C Sam. They could also provide sentencing enhancements for crimes aggravated by the use of AI tools when those tools uh the scale or impact of the harm or make it more resource-intensive to investigate and prosecute.
▶ 0:44:34They could also look at enabling AI safety and transparency requirements. In conclusion, AI is a revolutionary enabler, but does not Bad actors choose to exploit it, the law must be ready. Thank you, uh Mr. Chairman, for the time. Thank you, Dr. Bound, and we have your written testimony, which is more expansive, so remind everybody we have that, so appreciate that. Um Miss Miss Perumal.
▶ 0:45:00For you, we'll give you your 5 minutes Chairman Biggs, Ranking Member McBath, and members of the committee, uh thank you so much for the opportunity to testify today and for creating this forum to discuss how AI is changing the landscape of cybercrime. I'm honored to share my perspective on how this technology is making these threats more accessible, more personalized, and more difficult to My name is Zara Perumal.
▶ 0:45:25I'm the co-founder and CTO of Overwatch Data, a cyber threat intelligence company that uses AI to identify and analyze emerging threats in the cybercrime and fraud Through our work, we see every day how AI is used to both prevent and also to facilitate criminal activity. I'd like to focus my remarks today on how we see AI changing the threat landscape and what we can do about it through both education and innovation.
▶ 0:45:53AI is a powerful general-purpose tool with a broad range of applications for criminal activity and for a broad range of threat actors. It can be used to learn how to commit crimes, to write code, and craft realistic scam text messages, generate audio or voice clones, and of course create deep fake images or videos. Across this wide range of malicious use, three trends stand out. First, AI is reducing the barriers to entry for cybercrime.
▶ 0:46:23Users can ask a chatbot, excluding ones explicitly designed for fraud, how to commit crimes. They can learn the technical skills they need to carry them out, and they can also use it to make their attacks more convincing and more Second, it's challenging businesses um by subverting identity verification systems. AI can be used to generate a photo for a fake persona or profile. It can then be used to generate high-quality synthetic fake IDs.
▶ 0:46:52And then if they're asked to verify their identity, they can join a video call, swap their face with their fake photo, and verify their access to that This is a problem not just for the specific business that's being targeted, but it's a problem because it gives them a foothold from which they can hide their identity for the future next online crime that they'll carry out. The third thing we see is uh crimes are becoming far more personalized.
▶ 0:47:19For example, voice clones are used to target the elderly by calling a grandparent in what sounds like their grandchild's and claiming to be in the hospital and in need of money. Employment scams prey on young adults who are looking for their first job. And I think one of the most disturbing cases is is the nudifying apps, which often target children. They turn ordinary photos into fake sexually explicit images, which are then used to bully, harass, and extort victims, in some cases driving them to suicide.
▶ 0:47:49This abuse is carried out to children both by their classmates and by remote There's a lot of harm, there's a lot that's changing, but there's also a lot we can do. Uh first, education and awareness can prevent and deter many of these harms. These crimes work because people don't expect them. If we invest in education across schools, workplaces, and communities, we can make these crimes less effective and more costly to carry Second, we have an opportunity to combat this with innovation.
▶ 0:48:20The same technology that is enabling these crimes can also be used to detect scams, find malware, and disrupt cybercrime. By supporting innovation and strengthening public-private partnerships, we can shift the technical advantage to the defenders. While AI enables crime to be more accessible, more personalized, and harder to detect, I remain optimistic.
▶ 0:48:41With the right investment in education and innovation, we can engage our whole society in building a future where AI expands access to opportunity, strengthens safety, and helps people spend more time on what matters. On a personal note, it's very exciting to me to see that Congress is addressing this issue and putting a spotlight on it. Uh thank you, and I look forward to your questions. Thank you very much. Uh Mr. Vinsky, you're recognized for your 5 minutes.
▶ 0:49:08Chairman Biggs, Ranking Member McBath, and members of the subcommittee, thank you for the opportunity to testify today on behalf of the American Civil Liberties Union. I will address two issues this morning. First, it is crucial that our response to criminal uses of artificial intelligence adhere to the Constitution, civil rights, and civil liberties.
▶ 0:49:27Second, efforts by Congress and the administration must not inadvertently open the door for AI abuses, such as through a moratorium on state regulation of AI, or continuing consolidation of federal data. With appropriate measures, Congress can ensure that AI is safe, effective, and consistent with our rights and First, Congress's measures to address criminal AI must comport with the Constitution, civil liberties, civil rights, and privacy.
▶ 0:49:56For example, traditional First Amendment activities do not lose their protection simply because artificial intelligence was used. Editorial content moderation using AI is not categorically exempted from the First Amendment's protections, and neither is commentary on politicians or candidates for office. Speech about politicians and candidates in particular lies at the heart of the First Amendment and enjoys special protection. Consequently, courts have readily and correctly overturned laws prescribing false speech about politicians and candidates.
▶ 0:50:27The emergence and use of AI does not change those core foundational constitutional precepts. Likewise, privacy concerns may arise from obligations imposed on platforms that host and distribute AI systems. Requirements or incentives to search users' communications, to restrict their publication of models, code, and data, to monitor or report their online activity, or to prohibit or undermine encryption, all increase governmental surveillance, and in some circumstances may violate the Fourth Amendment.
▶ 0:50:57As the committee considers legislation addressing criminal uses of AI, we urge you to ensure that speech, privacy, and other important civil liberties are Second, the recently rejected AI moratorium would have dramatically increased the risk of AI harms, including criminal and fraudulent Similarly, the consolidation of federal data is creating an enormous risk of AI The moratorium that was included in versions of the reconciliation package was sweeping, preempting state laws
▶ 0:51:27and local regulations that regulate AI for 10 years. Although the moratorium included limited exemptions for some generally applicable laws, serious questions about the scope and workability of those exemptions For example, dozens of states have passed laws regulating deep fake non-consensual intimate imagery, often by amending existing statutes to clarify their application to generative AI.
▶ 0:51:51Similarly, Tennessee's Elvis Act extends legal protections to a person's voice, including a simulation of the voice. It is not clear if such laws, with their express application or clear intent to apply to AI, qualify as generally Moreover, in many instances, addressing AI's harms requires legislating specifically on AI. Establishment of an AI moratorium will jeopardize these efforts, giving bad actors a blank check.
▶ 0:52:19As ranking member Macbeth recognized, 17 Republican governors and members of both parties and both chambers of Congress opposed the moratorium before Congress stripped it from the reconciliation package in a 99 to 1 vote in the Senate. Of more immediate concern, consolidation of federal data creates a platforms for supercharged AI-driven surveillance.
▶ 0:52:40And while data consolidation and sharing could potentially improve governmental operations in limited circumstances, efficiency should not be elevated over robust protection of our privacy. Otherwise, consolidation could risk the creation of vast and unaccountable surveillance platform capable of tracking citizens' activities, movements, and associations.
▶ 0:53:01Such a platform would be readily analyzable by large language models, machine learning, and other AI systems, such as black box policing algorithms used by federal law enforcement to ingest governmental data and predict who is likely to commit crimes. Data consolidation could lead to biometric information gathered by federal law enforcement or during air travel being readily accessible by other agencies.
▶ 0:53:26Records related to firearms might be accessible across the federal government, and IRS data reflecting contributions to organizations like the ACLU, the NAACP, the NRA, or the Heritage Foundation could be accessible to federal law enforcement without meaningful process. It is essential for Congress to block the creation of centralized government dossiers on each of us. Thank you for the opportunity to testify before this subcommittee, and I look forward to your questions. Thank you, Mr. Vinsky. Now, Mr. Redboard, you're recognized for your 5 minutes.
▶ 0:53:56Chairman Biggs, ranking member McBath, members of the subcommittee, my name is Ari Redboard, and it's an honor to appear before you today on behalf of TRM Labs, where we work every day with law enforcement, financial institutions, and national security agencies to detect, investigate, and prevent illicit activity in the digital asset ecosystem.
▶ 0:54:19Before joining TRM, I spent about 11 years as a federal prosecutor at the US Department of Justice, and later as an official in the US Treasury Department's Office of Terrorism and Financial In those roles, and now at TRM, I've seen one truth born out time and time again. Criminals are often the earliest adopters of transformative technology.
▶ 0:54:43They were among the first to weaponize automobiles to move illicit goods across state lines, adopt pagers and cell phones to coordinate narcotics networks, utilize encrypted messaging apps to evade surveillance, and exploit cryptocurrencies to steal and transfer illicit proceeds at the speed of the And now they are embracing artificial We are rapidly approaching a world in which the bottleneck for crime is no longer human coordination, but computational power.
▶ 0:55:12When the marginal cost of launching a scam, phishing campaign, or extortion approaches zero, the volume of attacks and their and their complexity will increase We're not just seeing more of the same. We're seeing new types of threats that weren't possible before AI, novel fraud typologies, hyper-personalized scams, deepfake extortion.
▶ 0:55:39autonomous The entire criminal ecosystem is That is why today's hearing matters. We must recognize that in the same way criminals are leveraging AI to disrupt and deceive law enforcement and national security agencies must be empowered to use AI to defend and respond. This is not optional. It is foundational to preserving public and the social contract itself.
▶ 0:56:09If adversaries are deploying large-scale AI-enabled crime with impunity and if the public no longer feels that government can protect them we risk a breakdown of that trust. The consequences are not just individual harms. They are systemic, national security level threats to our institutions and civic cohesion. At TRM, we see this shift every day.
▶ 0:56:36Through Chainabuse, our public scam reporting platform, we've tracked a 456% rise in AI-enabled scams, which often use deep fake technology, just in the last year. Ransomware actors are using AI to draft realistic phishing emails, identify vulnerable targets, and deploy malware that adapts to evade detection.
▶ 0:57:00On the laundering side, we're seeing bad actors use AI to automate and accelerate illicit money flows. We're also seeing fully autonomous fraud agents scraping personal data, launching scam campaigns, and even coordinating laundering operations. And most disturbing, we're seeing AI used to generate synthetic child sexual abuse material.
▶ 0:57:24Fake, but deeply harmful content traded online and weaponized in sextortion The solution to the criminal abuse of AI is not to ban or stifle the technology. It is to use it and use it wisely. We must stay a step ahead of illicit actors by leveraging the same innovations they use for bad for good.
▶ 0:57:49At TRM, we integrate AI at every layer of our platform to combat crime using machine learning models and behavioral analytics to flag complex obfuscation techniques, trace illicit cryptocurrency transactions in real-time, and identify emerging criminal We are developing and deploying AI-powered defense agents at scale to map illicit networks, triage threats, and surface early warning signs.
▶ 0:58:17These operational tools are already being used in the field to help global law enforcement agencies move faster, trace complex laundering schemes, and target the highest-risk activity, often stopping criminal networks in their tracks before they can cause further harm. The future of crime will be defined by but so will the future of enforcement. With the right investment, collaboration, and technology, we can meet this moment.
▶ 0:58:47Thank you again for the opportunity to testify, and I look forward to your Thanks so much. I appreciate all of you and your your testimony. And very very interesting. I hope we can get to some deep substance on it today. I now recognize the gentleman from North Carolina, Mr. Budd. 5 minutes. Thank you, Mr. Chairman. To the witnesses, thank you for coming to testify today.
▶ 0:59:11This is sort of a novel topic, but as each of you have stated clearly, this is a very important topic and development around the blockchain technology, AI technology, it's something that is sort of a is is is only going to become more prevalent and more dominant in just about every area of our life. And that's true here in America, that's true overseas. I think it's going to be one of those uh paramount moments that it's going to be um sort of formative. Where were you before? Where were you after?
▶ 0:59:41And uh to that end, as a former prosecutor myself, when I when I was prosecuting, I came on at the very end of the AI-free And I started to see how blockchain and cryptocurrencies and artificial intelligence was was infiltrating every um of the criminal world. And And to that end, uh Mr.
▶ 1:00:02Redbord, as the use of AI and blockchain technology does become more common, and it does become more integrated in every avenue, uh there's obviously access from domestic actors that are criminal and international actors. There's really no border that's recognized. How does that impact uh the criminal infrastructure, as it were, uh when you look at domestic versus international crime in that Th- Thank you so much for the question.
▶ 1:00:28Um and uh yes, I feel like you would uniquely understand this as a former AUSA as well. You know, look, uh we both prosecuted cases in a world where there were, you know, networks of shell companies and hawala's and high-value art and real estate used to launder funds. But today, as criminal actors are looking to blockchains and uh we can trace every transaction on an o- open public ledger, right? There's no more bulk cash smuggling. There's There's There's TRM to track and trace the flow of funds.
▶ 1:00:56So, I think what we see right now is this really interesting convergence between AI crime, as we've we're going to discuss today, a- and crypto. And really primarily crypto is often the means of value transfer in these different crimes, right? You see these deepfake scams where they are scams trying to get cryptocurrency from, you know, investors or or users. They are uh ransomware actors who are supercharging attacks where cryptocurrency is the payment.
▶ 1:01:22The significant difference now as we're investigating crimes as prosecutors and law enforcement is that we can trace and track every one of those payments on open public ledgers, which allow us to do financial crime investigation really better than we've ever done it before. Is there the ability as you see it to pinpoint with specificity criminal activity and I would say more importantly going back to the trust that we need in law enforcement pinpointing criminal actors because it's such a foggy space to many people.
▶ 1:01:52Can you pinpoint the actual criminal as opposed to just criminal activity? It's a great question and and absolutely in many circumstances. What we're doing essentially at TRM is we're taking that raw blockchain data, right? Those alphanumeric addresses, those crypto wallets and we're associating them with real-world entities. Um oftentimes it's terrorist financiers, ransomware actors, sanctions for example, um and that allows law enforcement to then take that data and track and trace the flow of funds to build out networks.
▶ 1:02:22Is there Cartels are a great example of that today. I'm sorry. Is there a risk that cartels, terrorist states could use legitimate constructs on the blockchain uh that are developed here in the United States for their own benefit, therefore taking advantage of a legitimate structure or a legitimate software that's developed here? Absolutely. And I think the real challenge for regulators and policy makers is how to ensure that lawful users have access to those types of tools and yet stop bad actors from using them.
▶ 1:02:50And to me the answer is and the US Treasury Department over the last few years has been a done a pretty good job on this. Target the bad actors, the North Korean cyber criminals, the ransomware actors, uh the scammers as opposed to necessarily the the lawful services that you they're using. And is there a risk if we are too zealous in the prosecution?
▶ 1:03:07As a prosecutor, I'm I'm I'm I'm all for strong law enforcement, but if we are too aggressive on the front end as this technology is developing, could we stifle domestic innovation here at home if we are too aggressive in in Absolutely. It is it is critical that we continue to focus on the bad actors in the space, which will allow the lawful ecosystem to grow as opposed to the lawful services that are being used by bad actors. So, absolutely.
▶ 1:03:33And really the key to all of this is to stop bad actors from leveraging the technology to allow this industry and this uh this technology to grow. And then briefly, what can we do in Congress to ensure that law enforcement has the resources to target the bad actors with with specificity? That's exactly right. I mean, today what we really have across the US government is a cadre of law enforcement agents that are really true experts, power users of blockchain intelligence tools. What we really need is that that that cadre to grow significantly.
▶ 1:04:02As bad actors are leveraging AI, as they're leveraging blockchain technology, every federal agent should have access to tools and the training necessary to sort of meet this new moment from a technology Sir, thank you. Thank you. Other members, I ran out of time. Mr. Chairman, I yield back. Thank you. And um that objection, I propose that we have a second round of Seeing none, we will we will proceed in that fashion. And now I recognize ranking member Ms. McBath.
▶ 1:04:33Thank you, Mr. Chair. And I just have to say that, you know, and just in listening to each and every one of the witnesses, I mean, I'm just really amazed at the depth um of of the use of criminal usage of AI. Really, thank you so much for what what what you bring to the table today. But I do kind of want to talk a little bit about facial recognition. The Detroit Detroit Police Department reportedly conducted 129 facial recognition searches in 2020.
▶ 1:05:01And all on African American people. And the following year, uh 95.6% of the searches target targeted black Mr. Vinsky, how does the use of AI-enabled facial recognition comply with the Fourth Amendment's equal protection principles?
▶ 1:05:21It raises serious concerns, and as far as I know, there's not been a clear holding that equal protection principles are violated by the use of facial recognition technology, but it certainly raises those concerns because of the disproportionate impact we've seen that technology have on protected classes, particularly as you said, uh black people and in particular black men. And we've also engaged in civil rights litigation to defend individuals uh who have been wrongly identified by facial recognition technology.
▶ 1:05:51To a large extent, this is a matter of process, ensuring that police departments have appropriate processes in place so that there isn't uh reliance solely on a identification made by a facial recognition uh technology to bring in a suspect, that there isn't bias in lineups and things of that nature.
▶ 1:06:11But because of the certain threats that we've seen here and the uh ways that the technology can struggle in real-world conditions, we've long stood by that there needs to be a moratorium for law enforcement uses of facial recognition Um thank you for that.
▶ 1:06:27And it's just so interesting you should say that because even on my phone, I have a facial recognition and sometimes it says, "I don't recognize you." And I'm like, "Well, you know who I am, but of course, there's still problems with AI and the technology still needs to be advanced. Uh Mr. Vinsky, I'm going to ask you another question. What warrant uh what what warrant requirements and limitations should be applied for facial recognition tools when they're used by law enforcement?
▶ 1:06:54Well, as I said, our overall stance is that law enforcement should not be deploying the technology at all because of the underlying foundational issues of how it can struggle with a a of protected classes incorrectly identifying people, especially in real real conditions where lighting may not be ideal, where the surveillance footage may be grainy, and that can result in someone who's 8 months pregnant being apprehended for a crime where there clearly was not a pregnant person involved.
▶ 1:07:23Uh the use of facial recognition technology may not necessarily implicate the Fourth Amendment, but as I said, it raises very serious concerns about perpetual surveillance, the ability of the federal government to identify individuals in public spaces going about their daily lives without any recourse, without any judicial oversight, and that is ultimately a policy question for legislators, city councils, and Congress to step up and regulate. Thank you for that. And uh Dr.
▶ 1:07:52Bound, in your experience, have you found that AI-enabled tools used by law enforcement are tested and evaluated before they are deployed to ensure that they are safe and effective? So, in my experience in as in in law enforcement as a prosecutor, recently as a supervising prosecutor, um the the tools that are are being used are are certainly going to
▶ 1:08:23depend on on the jurisdiction that's using them. And states, counties, um certainly federal government uh from from my my experience in uh in the Department of the Air Force, law enforcement organizations that are are starting to use these tools are are relatively new users.
▶ 1:08:45in in the Air Force, any any AI tool is supposed to go through rigorous test and uh standards to ensure that the uh it is being uh results in a a certain quantified uh reliability, and that's very challenging to do uh with some of these tools, particularly when you're talking about edge cases like African-American men when they are not found frequently in in data sets. And so, those questions are being asked.
▶ 1:09:13I don't see in my experience the the type of rigorous standards being established across the board by by by regulators. And so, until that law enforcement's going to try to keep up and it's tempting to do that, but there there's likely to be some gaps there. Thank you. Thank you, gentlewoman from Illinois. Now, recognize the gentlewoman from Florida, Ms. Lee, for 5 minutes. Thank you, Mr.
▶ 1:09:42Chairman, and welcome to our witnesses today. As a member of the House's Bipartisan Task Force on Artificial Intelligence, I had the opportunity to work with members on both sides of the aisle to discuss a national approach to artificial intelligence that would encourage innovation, strengthen our global leadership, and also confront serious threats, including those like you all have been discussing here today that involve criminal misuse of this technology.
▶ 1:10:13Today's hearing, among other things, highlights one of the most urgent of those threats, which is the exploitation of children through AI. From synthetic child abuse materials to predatory chatbots to real-time location spoofing, we're seeing criminals use AI to expand both the scale and sophistication of their crimes. But, AI can also, we know, be part of the solution.
▶ 1:10:39In cases like Operation Renewed Hope, AI helped federal agents identify and rescue minor victims who might otherwise have never been found. So, one of the things that we're interested in doing is ensuring that law enforcement, child protection nonprofits, and trusted partners in the private sector have access to effective, responsible AI tools, and the legal clarity to use them.
▶ 1:11:07It's about stopping criminals, saving lives, protecting children, and ensuring that we're doing our part to help technology be a force for good. So, on that subject, Ms. Paramal, I'd like to follow up with you, and I'd like to know what would you recommend Congress prioritize to better equip law enforcement with the tools they need to stay ahead of AI-enabled Well, thank you so much for the Uh I think a few things come to mind.
▶ 1:11:37One is strengthening public and private partnerships. I think the more that we have the opportunity to share information across industry and government what the threats we're seeing is incredibly helpful. I also think making it easier to share technology and share the innovation. I think frankly it can sometimes be difficult, um especially as small businesses trying to figure out how to to share that technology, which makes a delay.
▶ 1:12:01So, that as you have a new way that we can maybe find something like trafficking or better detect AI-generated harm, it can be difficult to then deploy that. So, I think anything that is to improve that public-private partnership would be incredibly helpful. And are there specific legislative or funding priorities that you or your clients have identified that you think would be impactful? Yeah, I think so one one a few things that are kind of we see with our clients.
▶ 1:12:31Um one is there's a big challenge to identity in terms of online identity. AI-generated agents can more explicitly scrape, use websites for fraud. And then on the other side you see also see things like ID fraud where people are using this to hide their identity and commit online crimes. I think that's an area that the industry is generally trying to to adapt and respond to because that's how so much of fraud and scams and extortion is then carried out.
▶ 1:12:58I think anything another thing that comes to mind is this to the earlier point on innovation. If it's easier to kind of share and collaborate, that would be I think incredibly helpful for for us in the private sector. And I'd like to go back to you, Mr. Redbird. You said something in your remarks that I thought was really that AI is also the future of enforcement. I believe your words were invest, collaborate, and we can we can be more effective.
▶ 1:13:25I would like to hear in your view, what are the most urgent risks posed by AI to national security and public safety? And what would you like to add about what we can be doing in Congress? Thank you for the question. Really what we see AI doing today is supercharging criminal activity that we've seen exist for some time. So now you don't need a ransomware affiliates because you can have AI agents that are automatically malware.
▶ 1:13:52We're seeing cyber attacks you know, at scale by North Korea and other types of cyber actors. And then we're seeing the laundering of the funds that are stolen move faster than ever As I mentioned in my testimony, we've seen a 456% increase from last year in scam activity involving AI. We have to move as fast as the criminals. So when we think about these issues at TRM, it's how do can we move faster?
▶ 1:14:17How can we use AI the same way they're moving funds to track and trace those funds in order to ultimately seize them back. So I really it's it when you when you ask it's it's the tools and the training to to ensure that every single law enforcement and national security professional have access to the same tools that many cyber criminals are using today and obviously the funding necessary to support that as well as the training. Thank you, Mr. Chairman. I yield back. The gentlelady yields back.
▶ 1:14:47I recognize myself for 5 minutes and I appreciate the testimony that we've had. Um I have a different line of questions for the next round. But but things you've said in the in your testimony and what I've heard in the first round makes me want to ask uh some specific areas. You don't have a lot of time to respond. So, I'm going to ask and I'm going to cuz I want a quick response from every one of you.
▶ 1:15:10So, one of you mentioned the Elvis Act in in in Tennessee prohibits the simulation of uh of voice, basically. That's that's how that What about uh uh what about any other person? So, I'm thinking, what if you do if there's a deep fake of a of any other public um and you have that person say something that's pernicious, something that's bad, something that's politically inflammatory, whatever.
▶ 1:15:39It what do we have laws in place that prohibit that? Or is it is it just wild wild west? Let's start with you you, Mr. Redbord. Sort of a slightly more broadly, I would say that we have laws in place that absolutely cover a lot of these areas, but we're going to need to add AI to to a lot of them. When I when I think about these issues, for example, when you talk about um these types of scam activity that are being supercharged at by AI, we have wire fraud statutes to to address them.
▶ 1:16:07Right right and I and we'll get into that, too, but I'm talking specific. This is a specific case. So, you let's say you have a public figure and you have them say something that's totally outrageous, it's totally deep faked, you can't tell, the average person can't tell if they if that person uh was attrib- if that language is attributed to that person elsewhere, you might have a libel, you means be a civil claim, you might have a civil claim of libel or defamation of character, something like Does that, in your opinion, exist when you when
▶ 1:16:38someone manipulates a deep to do something like that? I I think it would require adding additive measures to what we have today. Mr. Rivensky. That sort of speech lies at the core of the First Amendment's protections. It's commentary on politicians. And so, for example, when the Well, but it's not commentary on politicians. It's It's It's if Let's Let's say with maliciousness maliciousness with malice. That's the word I'm looking for.
▶ 1:17:03With malice, you you say that Andy Biggs said X Y This This is just horrible. You put it in the New York Times. And you did it because you wanted to um harm me. And if you take, for example, the Republican National Committee's deep fake about President Biden announcing a draft for Ukraine, that's commentary on public events. But, of course, existing exceptions to the First Amendment still apply to AI. And that means That's what I wanted to get at.
▶ 1:17:32That's what I wanted to hear from from from you whether the whether the um something like uh a defamation like defamation subject. That's why I specifically used New York Times. Ms. Piramal. Same Same question. Yeah, I'm not super familiar with the legal side, so I can talk more of the technology, but I do see that um it is challenging uh the technology. Right. Thanks. Dr. Ben. So, there's there's this inherent friction uh that that we see uh and I agree with with both Mr.
▶ 1:18:02Rivensky and Mr. Rivensky uh that uh what what you described, sir, is is likely protected under First Amendment. Um You have Unless there's malice. With with malice. Now, there's there's legal protection certainly from from a civil right of action for if it were to to be subject So, so let's Not to Not to interrupt I don't want to be rude to interrupt, but I do want to interrupt.
▶ 1:18:22Um What my question is Let's Let's expand A true deep fake is so persuasive, you can't tell the difference side by side of me over here and the deep fake. We we've had examples of of of parents, grandparents, they can't tell the difference between the deep fake and the voice of the kid. They They look the same, they act they act the same, they're remarkable.
▶ 1:18:51How do How do I have protection, for from someone from someone doing that? I mean, we And And this is going to lead into the CSAM, which I was hoping I would have enough time to get get to that because it's the same type of deal where you see CSAM, which is so persuasive and sick and disgusting, that's all AI-generated. But can you And And we know this I mean, you mentioned the the the one of the of the Ukraine thing.
▶ 1:19:19What remedy does What does someone have with their victim of of this kind of generative AI? Mr. Chairman, if it were to fall under the statute of like wire fraud, so you look at the intent of what's behind it. What are the protections there? If it's If it's to create misinformation, you certainly articulate it that the challenge and the potential harm that that may not be outside of the law.
▶ 1:19:45And so there there are gaps in in protection when you're facing particularly harmful activity using deep fakes. Yeah, thank you. Um We'll be We'll be talking about that in the future. So, that ends the first round of questioning. And now for the second round of questioning, recognize the from North Carolina, Mr. Budd. Thank you, Mr. Chairman. And I got to say I'm I'm happy to have a second round so soon. I wish more members would show up cuz this is important, but selfishly, I'm I'm enjoying the conversation.
▶ 1:20:16And all of you have basically indicated what was stated either directly or indirectly that computational power and ability will will dictate sort of the the new landscape. And obviously, AI will supercharge this. the the landscape is going to be forever changed. And I just I want to ask each of you, how far are we from having autonomous criminal behavior? Doctor, start with you. Go in order down the line.
▶ 1:20:47Those are fantastic questions. Uh so Thank you. My my My assessment is we're we're there. Uh we have we have plenty of autonomously um certainly from a a a bad actor that is uh using AI uh and using the autonomous features of of those models to perpetuate crimes, we're we're certainly there.
▶ 1:21:09The The the scale, the the sophistication, the speed that are are created by using AI-enabled uh models can certainly from from committing scams at scale, uh targeting personally, uh it finding uh cyber vulnerabilities. That is all happening already. Yeah, I I I agree. I think we're we're definitely seeing that now. It's the beginning of what's happening.
▶ 1:21:38It's being used for the more simple crimes. Uh I think we see different uses. You might think of simple bots that text people and send us these annoying scam text messages. Those are now can use AI and automate by pulling breached or leaked data about you. And then similarly with computer use agents, they can they're starting to fill out forms, but there's a large opportunity for those to get much more sophisticated. And I think for lately on the civil side, you know, we're seeing rapid advancement of artificial intelligence that's used to make decisions about who can get a loan, who has access to a house, and things of that nature.
▶ 1:22:08And often in many cases, that will output a score that humans are largely deferring to. So, artificial intelligence has reached the point where it is having an outsized effect on our lives, not just because of criminal activity, but because it affects so many important sectors as well. Thank you for the question. Um Um, we are there today, But, uh AI is not dominating criminal activity, and I think that's in large part why this this hearing is so important in this moment to start having this conversation.
▶ 1:22:36And this is really why at TRM over the last year or so, we have focused a lot of our attention, particularly how can we build AI tools that enable us to move faster. Cuz while we're not quite there yet, we're getting very very close. What's going to be required to make it uh responsive to meet the threat? What what what will be required? I'm asking. Oh, sorry. In terms of capacity, in terms of private sector investment, in terms of public investment.
▶ 1:22:58It Give me a broad picture of what's going to be great It's It's all of it, and I know public-private partnerships were talked about and it's often sort of this trite way to to as something to to discuss, but really what it has to be is the private sector building the tools that government can ultimately leverage to move as fast as the cybercriminals. And in your opinion, is the law lagging this new frontier, or are the existing criminal laws sufficient to protect the marketplace and victims like Mr. Biggs talked about? It'll absolutely be a combination of both.
▶ 1:23:27I think it'll be important when you talk about CSAM, which I know we'll we'll focus on on ensuring that the federal sentencing guidelines meet the AI moment for that. We will have AI need AI-specific criminal laws, but I will say that a lot of the laws we have today, wire fraud, bank fraud, those types of of laws, these types of disinformation certainly will include AI.
▶ 1:23:51And jurisdictionally, how do you see uh how do you see AI factoring into content, actions, vehicles designed overseas that penetrate into the American market? How how do we protect against that on a on a jurisprudence level? I I think it's a challenge. Look, you know, the the nature of crypto, the nature of AI, the nature of technology is it's global and cross-border. And we in in large part, we want to make sure that the innovation is happening here.
▶ 1:24:16And that's why it's so important that as we have these conversations, we're walking that line between stopping bad actors, but not stifling innovation in this critical moment. Just like the internet was born and and and may created in the United States, we need to ensure that that is true for AI technology as well.
▶ 1:24:32If I may add to that representative, as we think about ways that existing legal frameworks need to adapt to this rapidly evolving challenge, a multi-jurisdictional approach is is is the right approach and not just at the federal level, but also internationally and of course with states. And we've talked a little bit about the moratorium that was included in versions of the reconciliation package.
▶ 1:24:51The house did exempt criminal laws, but often in many cases civil penalties will be a necessary complement for example, in imagery at high schools. One more question for the for the panel real quickly. What can parents do to protect their children from uh this type of landscape? As a parent myself, I think education on the risk is is certainly important. I think that's something that is the the public sector can lead on.
▶ 1:25:21Law enforcement can lead on similar to to drugs, the risk of of AI, whether it's for scams, whether it's for CSAM, whatever harms it is surely impact children as I definitely agree. I I think especially for the CSAM harms, giving their children awareness that something like this might happen to you, it might have nothing to do with anything you did and here's how you can reach out.
▶ 1:25:49I think sharing that awareness because it they target the fact that people are feel shame when they have no reason to. So, I think that would be really helpful. Thank you. As a former teacher, parents are integral part in helping kids navigate the world and education and talking with kids about the new risks that are emerging are critical. Thank you. Education is absolutely critical as a parent of middle school and high school age kids, I appreciate this. One more point that I do think is important here though is that we We to ensure that they also know how to leverage it, Not that they're just afraid of it.
▶ 1:26:18I think their success in large part in the rest of their life will depend on their ability to leverage and engage with this technology. And I think it's absolutely so critical that on the one hand we protect them against the bad the harms, but also ensure that they're really able to use it and leverage it. Absolutely. Thank you, Mr. Chairman. I yield back. Thank you. Gentleman yields. We recognize now the ranking member, Ms. McBath. For Thank you, Mr. Chair. Um And once again, as you can as you can see, we are quite alarmed as as to what we're hearing today. So, thank you very much.
▶ 1:26:47I want to go back upon uh and touch upon once again what the chairman was just asking the question that he asked about. And um in specific I'll just each of you if you can just kind of tell us in a nutshell you're expressing to us that there are There are gaps in legislation. There are gaps in in things that we need to do here in Congress to make sure that there are protections that are enforcing and preventing these kinds of uh deep fakes and and all that we're talking about today.
▶ 1:27:17So, can you give us an idea? Tell us what kinds of legislation are going to be extremely important for us to put in place to prevent these kinds of gaps that you just expressed to us that there are today. Mr. Bound, Dr. Bound, you start, please. Ma'am, so one of the gaps uh may be closed soon.
▶ 1:27:40There's opportunity to HR uh 1283 which was introduced by this uh committee would amend uh Title 18 of the US Code uh Section 2252A which is the statute that covers child pornography. Uh uh and and CSAM. Uh it the the bill is intended to amend that statute to include AI generated CSAM within the definition and coverage under uh that criminal statute.
▶ 1:28:09And so, there are there's the Title 18 the criminal statutes that uh may need to be amended both in content on what is covered, what is criminalized, but also potentially in the sentencing guidelines as Mr. Redboard mentioned.
▶ 1:28:23And then there's as the chairman explained and in in his questions, there's there is a gap as well on the civil side that there there might not be a cause of action for for the that non-criminal because even that amendment that's proposed in the in the in HR 1283 still has to be constitutional. There is there's first amendment protections even on things that would normally be objectionable. Okay, thank you. Mr.
▶ 1:28:53Redboard, please. Thank you very much. I provided about five suggestions in my written testimony, but I'll just focus on one for purposes of this answer. It is absolutely critical that agencies at every level have access to modern investigative capabilities including blockchain analytics platforms integrated with AI, media authentication tools as we talked about, and AI enabled investigative tools. Congress should allocate dedicated funding for these tools along with specialized training programs. Thank you. And Mr. Vinsky.
▶ 1:29:24I think awareness of one where existing law can apply to criminal activity is critical in navigating the space. You know, for example, 2258A does has been extended and prosecutions have been brought for simulated CSAM material created regarding a specific identifiable child using AI technology. So I agree with Mr.
▶ 1:29:45Redboard that education, providing training, defense, and funding for critical infrastructure for schools and others to educate students and and other vulnerable populations about the threats of AI will be key and also to shore up their own cybersecurity infrastructure. Mr. Vinsky, I want to go back to something that you did touch upon though. You did um touch upon the moratorium on state and local AI, which actually failed.
▶ 1:30:11Um that last attempted that did fail, but the Republican chair of the House Energy and Commerce Committee has already vowed to continue to pursue it, even as they acknowledge that federal legislation setting standards on AI is still years away. As we work to develop that legislation, what principles or proposals should we consider? I think one thing I will look to and Representative Lee already referenced it was the House AI Task Force final report from the last Congress.
▶ 1:30:39That was a thoughtful sort of compendium of the various issues around AI regulation at the federal level, and it recognized that preemption in particular is a sensitive issue, and it doesn't need to be all or nothing. That there is a range of uh tools that can be used in adjusting what is the appropriate area for preemption, what is the appropriate amount of preemption in order to ensure that states have significant latitude to address these harms in a timely manner, which of course is beneficial for Congress as this committee looks at what works and what does not. Okay, thank you.
▶ 1:31:09And I one last question, Dr. Bound, how can public agencies use the procurement process to ensure that AI systems they want to acquire are safe and effective? So, they certainly articulate what the problem is and what the need is to create a demand signal uh for for private industry uh for uh for R&D uh for for academia to to do the research that is needed.
▶ 1:31:35And so, the they could the procurement system is a fantastic way for uh for federal agencies or or state agencies to ensure that the uh the standards are being met uh and that the capabilities are there and are being focused on in the development and the research uh at at the in the public sector or in the private sector and in academia. Thank you. And Mr. Mr.
▶ 1:32:00I have a unanimous unanimous consent uh to enter into the record a statement from Barry Friedman, faculty director of the Policing Project at New York University School of Law, dated July 16th, 2025. Also, enter into the record a statement for record dated July 16th, 2025 from Public Citizen regarding the growing threat of criminal exploitation through AI.
▶ 1:32:21And then also, last but not least, unanimous unanimous consent to enter into the record a statement from Keith Kupferschmid, chief executive officer of the Copyright Alliance dated June 13th, Without objection. Thank you. I yield. Thank you. Chair now recognizes the gentleman from California, Mr. Kelly, for his 5 minutes. Thank you, Mr. Chair, for calling this hearing.
▶ 1:32:42It's a hugely important topic and you know, we have often seen this arms race develop between criminals and law enforcement when it comes to the use of technology where criminals innovate and law enforcement has to innovate in turn and it's a matter of just trying to to sort of keep up.
▶ 1:32:58But with AI, it's a totally different ballgame in the sense that the development of new capabilities is happening so quickly and the nature of those capabilities is often emergent and surprises even the the people who, you know, train the systems and the ways in which they are being applied is is equally unpredictable to me it seems that integrating AI into law enforcement operations, it's not just a tool at this point, it's absolutely essential.
▶ 1:33:29But it's a tremendous challenge and requires a lot of expertise. So it seems to me that we need to be thinking very seriously about how we can have coordination and how we can make cutting-edge tools available to law enforcement across the country. And so I wanted to ask Mr. Redboard and Ms. Perumal, if I'm saying that correctly, um about uh your thoughts on this.
▶ 1:33:57Um I know that you have a law enforcement background uh and uh I know that you actually worked at Google and I believe it was just a couple days ago that Google announced that its uh cybersecurity AI platform uh for the first time detected and defeated a software vulnerability in the wild that was known to malevolent actors. So, maybe if you could both address kind of the role of the public and private sector in meeting this challenge. Thank you so much for the question and it's absolutely critical that the public and private sector work together on this as the question um noted.
▶ 1:34:26Look, um every federal law enforcement agency in the US today is using tools like TRM to track and trace the flow of funds, to automate tracing when it comes to cryptocurrency, to leverage AI tools in that respect. But, the reality is that it's still a handful of investigators that have this expertise and and and training.
▶ 1:34:45And as we move from crime on city streets to crimes on blockchains and in cyberspace, we're going to need every agent and investigator, not just federal, but state and local, to also have access to these types of tools and training. And as you mentioned, you know, cybercriminals are now using this more and more and will eventually be using this at scale. Every agent and investigator who is investigating these cases, tracking them, needs to be moving as quickly. So, I would say tools and training primarily.
▶ 1:35:12And then the other piece is really true public-private partnership where, you know, FBI and IRS-CI and HSI and others are working closely with the private sector to share information to move as quickly as Thanks very much. Thank you for the question uh and I love that you're following the vulnerability discovery. That's awesome. Uh I think to to your point uh the criminal ecosystem is using this to scale uh their offense.
▶ 1:35:39We have to use it to scale our defense and to make that more effective if we're going to keep up. Um I mean, there's a lot of ways we can do that from better detecting malware to better understanding the tools and tactics they're using, better detecting the scam messages. I think if we can enable as I said the public-private partnerships which we keep repeating but I think if we can make it easier and much faster to adapt as criminal ecosystem adapts that makes us a lot more effective and there's so many opportunities if you even think about all the reports of scams that maybe we already have access
▶ 1:36:09to or law enforcement has access to. If we can just go through that data and find the trends using AI to speed up and scale investigations is a way that we can really keep pace with the criminal ecosystem. One one more thing I would add to that is that you know historically and I was a prosecutor for a long time we investigate specific cases right there's an instance of crime and we need to investigate that specific case.
▶ 1:36:30What this technology really allows us to do is build out networks to understand crime typologies to understand sort of where the threat actors are and how they are engaging and what they would potentially do next. And it really it's it's an extraordinary moment when it comes to not just law enforcement but how to disrupt adversaries from a national security perspective.
▶ 1:36:51So I think what this technology and I think you got to this in your question really enables is not just sort of the one-off harm that's been done to an individual but how do we build out networks of cartels of fentanyl dealers of scam networks in Southeast Asia and elsewhere and this it you know I guess connected to blockchain intelligence really allows us to do a lot of that today. Interesting. So you can address crime much more in a more efficient way and more preemptively.
▶ 1:37:20And we even see that today in the actions that are coming from the US Treasury and Department of Justice where they're going after networks. They're doing civil forfeitures. There was a very large civil forfeiture complaint filed about 2 weeks ago by the US Attorney's Office in DC against 20 $225 million involved in pig butchering scams. It was a network. So we're seeing them use it Very interesting. Thanks very much Mr. Chair.
▶ 1:37:43It seems I think there is a role perhaps uh for us to play in supporting these public private private partnerships and in facilitating the training and access to uh this uh these knowledge this knowledge and these resources in law enforcement across the country. Uh I yield back. Thank you.
▶ 1:37:57Uh gentleman yields back and I'm going to recognize myself for my my last for my my my 5 minutes here, but I would I would suggest that this is as we started off that I said this would be the first of its kind and I meant that that we're going to have to keep keep pushing this. So, uh I think a week let's see maybe a week ago Elon Musk announced Grok-4. And he talked about artificial intelligence.
▶ 1:38:26Um and Grok-4 is going to have the intelligence it already has beyond a PhD engineering, science, genius, etc. artificial superintelligence.
▶ 1:38:44and we we've touched on it lightly here today using different terms, but but um my I guess my question is at what point do we no longer see computational with a human first mover and you have a um iterative uh process that essentially and we're we're we're
▶ 1:39:14there in some extent now, but we're not totally there because human interaction still is the first mover. But at some point it won't be a human that's the first mover anymore. It'll be the algorithm And I how long before we get there? How do we get there and prevent the the crime and and provide the deterrence that that is necessary?
▶ 1:39:42And and so for the hypothetical, I'll give you how long um adjudicating whether there's probable cause or not for a search warrant or arrest warrant is merely algorithmically sustained as opposed to uh having a human make that determination.
▶ 1:39:59So, with that bizarre uh but acknowledging that we are actually moving so rapidly that we probably thought by 2050 you'd be getting to artificial superintelligence, but it looks like maybe before 2030 you're going to be in artificial superintelligence. Dr. Bone. And then we'll go down the whole whole whole panel. Thank you, Mr. Chairman. certainly a thought-provoking exercise.
▶ 1:40:26Uh I'm glad we're we're still at the point where it's an exercise and not not reality, but I I recognize that we may not be far from there. Before we get to artificial general intelligence or before we get to certainly artificial superintelligence, and those are still theoretical, uh not not uh a foregone conclusion. Uh there is this very powerful and very rapidly increasing um uh a genetic AI.
▶ 1:40:55Uh and we're we start to see some of what you described already taking place at a admittedly lesser extent than what we would if it were true AGI or or ASI. Um but we still have algorithms that are making decisions on behalf of humans uh that are able to do so at at speed and often uh at at a scale that is is it certainly makes it difficult for the human agent to observe and to to be
▶ 1:41:25a part of. Uh and so, it it really depends on how much uh trust, how much uh authority we provide the those agents, and what the what those uh models, how are they fine-tuned to to limit that? And so I I do believe, as you said, Mr. Chairman, this is the first of hopefully many.
▶ 1:41:45Having having some of those industries, some of some of those um private sector companies describe that so that so that this this subcommittee and and Congress can ensure that they are able to uh predict and and know and and and set up those those guardrails if necessary to limit what what you're concerned about. Ms. Perumal. And And since we only have a minute left, each of you get 20 seconds.
▶ 1:42:15I think you very interesting question. I think we see AI agents making simple decisions today. I think for more complex decisions, as the models can do more complex reasoning in the next few years, it really should come down to how important is the decision and then what transparency and explainability we can get from the model and how much can human oversight is necessary. I think it really depends on how risky that individual decision is is where we should should hopefully see the roll out for these different autonomous decisions. I'm going to build directly on that. The role of AI is a choice.
▶ 1:42:45And laws passed in Texas, the National Security Memorandum that governs national security uses of AI, say that certain things are off-limits for artificial intelligence. And you mentioned probable cause, that strikes me as a core foundational tenant of due process that should probably be truly a human activity. And that is a policy choice that we make of who will be what will be human, what will be AI, and where will humans be in the loop. I've never seen anything move as fast as this has moved in my lifetime.
▶ 1:43:12And uh while I don't have a great answer for how long, it's certainly coming. And if I could leave this committee with anything today, it's that we need to move as quickly building the tools, working with this body in order to provide the right the right laws there. As an old-school prosecutor, I'm happy with judges still making decisions around probable cause. But um but I I do think we really need to ensure that we also are using the tools defensively to meet this moment. Great. Thank you all for being here. My time is expired.
▶ 1:43:42There's so much more to to cover with this and uh as like I say, it's just the first and hopefully we'll get back together soon and continue this please uh feel free to contact myself or the ranking member. I'm I'm assuming that's okay. She says that's okay. Because we want to have a dialogue and see where there's holes, where there's gaps. Uh let us know. We we we want to do stuff that's um preventative without being constraining if that's possible.
▶ 1:44:13So, thank you. With that, we are adjourned. Thank you.