ADAPTING TO NEW REALITIES: FINANCIAL CRIMES AND EMERGING AI TECHNOLOGY IN GLOBAL AND EU PERSPECTIVE

Abstract

The increasing integration of artificial intelligence (AI) and

machine learning (ML) in financial markets has brought both

opportunities and risks. While AI-driven tools enhance efficiency

and profitability, they also introduce potential threats, particularly

in the realm of financial crimes. This paper explores the role of AI

in financial markets, focusing on its potential to facilitate

fraudulent activities such as market manipulation, price fixing,

and collusion. The unpredictability of AI, coupled with its ability

to autonomously make trading decisions, raises complex legal and

regulatory challenges.

A key issue discussed is the difficulty in attributing criminal

liability when AI autonomously engages in illicit financial

activities. Traditional legal frameworks rely on human intent

(mens rea) as a cornerstone of financial crime prosecution.

However, AI-driven misconduct challenges this notion, as

existing laws are often inadequate in addressing cases where no

clear human perpetrator can be identified. Through a comparative

legal analysis of the US, UK, and European legal systems, this

paper highlights the limitations of current regulations in holding

AI developers, financial institutions, or corporate entities

accountable for AI-induced financial crimes.