Balancing the scales: Why Crypto and AI both need urgent oversight

Balancing the scales: Why Crypto and AI both need urgent oversight

Technology has a way of moving faster than the rules meant to govern it, and nowhere is this more evident than in the parallel rise of cryptocurrency and artificial intelligence (AI). As someone who has spent years reporting on the intersection of innovation, finance, and policy, I’ve seen firsthand how these two forces have reshaped the global landscape. For a long time, I was convinced that cryptocurrency was the most pressing issue regulators needed to tackle. Its decentralized nature, its potential for misuse, and its volatile markets seemed to demand immediate action. But as AI has surged forward—especially with the recent emergence of AI agents capable of making independent decisions—my perspective has shifted.

Both crypto and AI are moving at breakneck speed, and both need urgent attention. However, if I had to prioritise, I’d argue that AI now poses the greater challenge. Its ability to influence critical processes, blur ethical lines, and even disrupt the crypto sector itself makes it a more complex and immediate concern. We’re in a regulatory race, and the consequences of falling behind could be profound.

Need for crypto regulation hasn’t diminished

Let’s start with cryptocurrency, which has long been a lightning rod for debate. When Bitcoin first gained traction over a decade ago, it was hailed as a revolutionary alternative to traditional finance, but it also raised red flags for regulators. The anonymity of blockchain transactions, the wild price swings, and the potential for cryptocurrencies to be used in illegal activities like money laundering made it a regulatory nightmare. I remember the frenzy of 2017, when Initial Coin Offerings (ICOs) were popping up everywhere, raising billions of dollars with little to no oversight. It was a wake-up call for governments and financial watchdogs. The Financial Action Task Force (FATF) stepped in with guidelines to curb illicit uses of crypto, and countries like the U.S. and those in the European Union started working on laws to regulate exchanges and wallet providers. Yet, even now, the global regulatory landscape for crypto remains uneven. Based on what I have seen, I believe that only about half of the jurisdictions surveyed had robust crypto regulations in place, leaving plenty of room for risks to fester.

The need for crypto regulation hasn’t diminished. With the total market value of cryptocurrencies hitting $3.1 trillion in early February 2025, according to CoinMarketCap, digital assets are no longer a niche interest—they’re a significant part of the financial ecosystem. The rise of decentralised finance (DeFi), where users can lend, borrow, and trade without traditional intermediaries, has only added to the complexity. These platforms are innovative, no doubt, but they often operate in a murky legal space, with little protection for users if things go wrong. The collapse of FTX in 2022, which wiped out $8 billion in investor funds, was a stark reminder of what can happen when oversight fails to keep pace with innovation.

And while regulators like the U.S. Securities and Exchange Commission (SEC) and the European Securities and Markets Authority (ESMA) have started cracking down, the global patchwork of rules still leaves too many gaps. In my course of advisory work, the feedback I got was that many cross-border crypto transactions happen in regions with weak or no regulations, raising the stakes for financial stability and crime prevention.

The rapid ascent of AI agents

But as significant as these issues are, they’ve been overshadowed by the rapid ascent of AI. When I first started covering AI, it was mostly seen as a tool for improving efficiency—think predictive analytics or targeted advertising. That’s changed dramatically in just a few years. Today’s AI systems, especially generative models like GPT-4 and autonomous AI agents, aren’t just tools; they’re decision-makers. In finance, for example, AI is now managing portfolios, executing trades, and even approving loans, tasks that used to require human expertise. Based on my opinion and how fast AI is being adopted, AI could handle up to 30% or even 40% of all financial transactions by 2030. That’s a massive shift, and it raises serious questions about accountability and risk. Who is responsible when an AI agent makes a bad call? How do we ensure these systems are transparent and fair? And what happens when they make decisions at a scale and speed humans can’t easily oversee?

The financial sector isn’t the only area feeling the impact of AI’s rapid growth, but it’s a prime example of the challenges we face. AI agents are now deeply embedded in trading, using vast amounts of data to spot trends and make split-second decisions. This has raised concerns about market stability. The European Central Bank (ECB) cautioned in 2024 that AI-driven trading could lead to sudden market crashes if algorithms converge on the same strategies or amplify volatility. And when you bring AI into the crypto world, the risks multiply. AI is already being used to optimise trading strategies, detect fraud, and even govern decentralised organizations. But as a recent social media post pointed out, the use of AI in crypto smart contracts could open the door to exploitation if these systems aren’t carefully designed. Regulators are only beginning to grapple with these issues, and the pace of change isn’t slowing down.

Our regulatory systems are struggling to keep up

Another area where AI poses unique challenges is intellectual property. Generative AI can produce content—text, images, music—in seconds, but who owns the result? In finance, AI-generated reports and analyses are becoming standard, but the legal status of that content is far from clear. There are cases where AI developers are using copyrighted financial data to train models, and the cases are still unresolved. I did a survey in my private group consisting of business owners and more than 70% of them who were using AI for content creation were unsure about the legal implications. This uncertainty is even more pronounced in crypto, where AI-generated content is often used to promote new tokens or sway market sentiment, sometimes without any disclosure of AI involvement. These gray areas aren’t just legal headaches; they’re potential breeding grounds for abuse.

Looking at the current state of play, it’s clear to me that our regulatory systems are struggling to keep up. Crypto regulation has made some progress—think of the EU’s Markets in Crypto-Assets (MiCA) framework or the SEC’s efforts to classify certain tokens as securities—but it’s still a fragmented effort. AI regulation, on the other hand, is even further behind. The EU’s AI Act, passed in 2024, is a step in the right direction, categorising AI systems by risk level and setting stricter rules for high-risk applications. But even this groundbreaking law has been criticised for not fully addressing the global nature of AI development or the specific challenges posed by AI agents.

AI needs to take precedence

So, where should regulators focus their energy? In my view, AI needs to take precedence, not because crypto’s challenges are insignificant, but because AI’s implications are broader and more profound. Crypto’s risks—volatility, fraud, regulatory gaps—are serious, but they’re largely confined to finance. AI, by contrast, has the potential to reshape every facet of society, from healthcare to education to governance. Its ability to amplify risks within crypto, such as through AI-driven trading bots or flawed smart contracts, only underscores the need for a comprehensive approach.

This isn’t to say crypto should be ignored. The lessons we’ve learned from trying to regulate digital assets—such as the need for consumer protections and international cooperation—can and should inform AI regulation. But AI’s unique challenges, from ethical concerns to systemic risks, demand a level of urgency and innovation that we haven’t yet seen. Regulators need to act quickly, establishing clear rules for AI-driven decision-making and ensuring these systems are transparent and accountable. This will require not just technical expertise but also collaboration across borders and sectors. Initiatives like the UK Financial Conduct Authority’s Digital Sandbox, which uses synthetic data to test AI applications, are a good start, but they need to be scaled up and adopted globally.

Ultimately, the regulatory race between crypto and AI isn’t about choosing one over the other; it’s about recognising the unique risks each poses and responding accordingly. Both are transformative technologies with the power to reshape our world, for better or worse. But as AI continues to accelerate, its potential to disrupt decision-making, challenge ethical norms, and even destabilise systems like crypto makes it the more immediate priority. We can’t afford to wait. The future of finance, technology, and society depends on getting this right, and the clock is ticking.

 

 

Source: https://ciosea.economictimes.indiatimes.com/blog/balancing-the-scales-why-crypto-and-ai-both-need-urgent-oversight/118572627

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Uniswap Launches Unichain L2: All You Need to Know

Uniswap Launches Unichain L2: All You Need to Know

Since its launch in 2018, Uniswap has evolved to become a cornerstone of the decentralized finance (DeFi) industry, becoming one of the most widely used decentralized exchanges (DEXs).

Amid its growing popularity, Uniswap has struggled with high fees and slow transaction speeds. In a bid to address this issue, the platform has introduced Unichain, an Ethereum Layer 2 (L2) network specifically designed to optimize DeFi applications.

Similar to other L2s, Unichain is built to improve transaction speeds, lower gas fees, and improve user experience, all while using Ethereum‘s security.

In this article, we will explore Unichain and its aim to solidify Uniswap’s dominance in the DeFi ecosystem by offering a better user experience.

Key Takeaways

  • Uniswap has launched Unichain to solve high fees and slow transactions.
  • Unichain’s key features include Flashblocks for fair transaction ordering and Trustless Revert Protection.
  • The Validation Network ensures fast and secure transactions, preventing double-spending and block manipulation.
  • Unichain integrates with Ethereum’s Superchain for cross-chain liquidity.
  • With faster block times and no initial swap fees, Unichain aims to make DeFi trading faster and better.

What Is Unichain?

Unichain is a DeFi-focused Ethereum L2 chain designed to enable instant transactions, low fees, and cross-chain interoperability.

It was developed by Uniswap Labs using the OP Stack, an open-source rollup development stack. The OP Stack allows Unichain to join the Superchain, a network of interoperable L2 chains that share bridging, decentralized governance, upgrades, and a communication layer.

Anndy Lian, an intergovernmental blockchain expert, told Techopedia:

“Since its start, Uniswap has been a go-to for many in the DeFi community, providing a user-friendly platform for swapping tokens and adding liquidity.

“It’s only natural that Uniswap would evolve by creating its own blockchain, Unichain, to better serve and grow its business. This development not only solidifies Uniswap’s leadership but also tackles some of Ethereum’s challenges like high transaction costs and slower processing times.”

Unichain’s standout features are Verifiable Block Building and the Unichain Validation Network (PDF).

Verifiable Block Building

With Verifiable Block Building, Unichain aims to optimize user experience and market efficiencies by reducing block times, limiting maximal extractable value (MEV) losses, and protecting against failed transactions.

Built in collaboration with MEV solutions developer Flashbots, Unichain’s verifiable block-building feature looks to reduce the risk of “discretionary block ordering” by separating the role of block building from the sequencer.

Blocks on Unichain will be executed inside a trusted execution environment (TEE), which will allow external users to verify that blocks were built inside the TEE according to stated policies.

Unchain also aims to enable 200-millisecond to 250-millisecond block times by spitting each block into four “flashblocks.”

Unichain users will also benefit from the “trustless revert protection,” which reduces the risk of paying for a failed transaction. The TEE block builder simulates transactions while building blocks to detect and remove faulty transactions.

Unichain Validator Network

Sequencers are critical L2 network participants who are responsible for ordering transactions, batching them, creating new L2 blocks, and posting proofs to the Ethereum L1.

A notable drawback of Ethereum L2 chains is the centralization of sequencers. At the time of writing, popular L2 chains, including ArbitrumOP Mainnet, and Base, each have only one sequencer.

Unichain, too, will operate as a single sequencer L2. To reduce risks related to a single sequencer, Unichain introduces a decentralized network of node operators that independently validate the latest blockchain state called the Unichain Validation Network.

To become a validator on Unichain, users must stake UNI tokens on the Ethereum mainnet. The main function of Unichain validators is to perform simple block attestations to increase confidence in the state of the chain.

Why Was Unichain Created & How Does It Improve Uniswap’s DeFi Offerings?

Launched in 2018, Uniswap is a pioneer of automated market-making (AMM) protocols and is currently the most popular DEX in DeFi history boasting a cumulative volume of over $1.64 trillion, as of February 2025.

As Uniswap saw meteoric growth amid increased DeFi adoption, it soon became evident that the Ethereum L1 blockchain was not equipped to give Uniswap the high performance it craved.

Therefore when Ethereum set course to scale its blockchain with the help of L2 solutions, Uniswap took the opportunity to create a performant application-specific L2 called Unichain.

With Unichain, the DEX pioneer looks to solve two pressing issues Uniswap faces on Ethereum: high transaction fees and fast transactions.

Unichain solves the first problem by being an L2 chain that processes transactions off-chain before bundling them to post to the Ethereum L1. The distribution of gas fees across several L2 transactions is said to lower fees by 95% compared to L1 gas fees.

For faster transactions, Unichain is customized with features such as TEE block-building to produce one-second block times, a significant upgrade from Ethereum’s 12-second block time. Unichain ultimately aims to hit 200-millisecond to 250-millisecond block times.

In a bid to solve the fragmentation problem caused by the excess of L2 chains in the market, Unichain will join the Superchain collective, which is a group of interoperable L2 chains created using the OP Stack.

As of February 2025, the Superchain collective had over 25 members including Base, OP Mainnet, Soneium, Zora, Ink, and HashKey Chain.

Features of Unichain

According to Unichain’s whitepaper, the project has introduced several features that help it enhance speed, security, and efficiency within Uniswap’s DeFi ecosystem. Here are its key components:

  1. Unichain implements Flashblocks, a mechanism that locks in transaction order before execution, to reduce the risks of frontrunning and harmful MEV extraction.
  2. “Trustless Revert Protection” — A unique mechanism that ensures users do not lose gas fees on failed transactions.
  3. Unichain features a Validation Network where independent validators stake UNI tokens to help confirm transactions quickly and securely. This system prevents double-spending and block manipulation.
  4. Unichain is built as part of Ethereum’s broader rollup ecosystem (Superchain), ensuring liquidity access across different chains.
  5. Unichain significantly reduces transaction costs compared to Ethereum’s mainnet, making DeFi trading and liquidity provision more accessible.

The Growing Trend of Appchains in 2025

Appchains are blockchains built for a single app or a small set of apps. They can be layer-2 or layer-3 solutions, often forked from existing blockchains to save time and improve compatibility.

Appchains are important because they speed up transactions, lower costs, and improve security by focusing resources on just one application. They also give developers more control over governance and upgrades.

So far in 2025, several new appchains have emerged, each tailored to optimize performance for specific dApps. Last month, Ethereum Layer 2 project Starknet introduced the SN Stack, a software suite enabling developers to launch customized appchains.

Similarly, HyperLiquid and dYdX have launched their appchains to improve decentralized trading by offering lower latency and deeper liquidity.

Future of Uniswap & Unichain

Uniswap’s Unichain could be the platform’s golden ticket to shape the future of DeFi with faster, cheaper, and more scalable trading.

Lian added:

“Unichain is set to shake things up in DeFi by offering much faster transaction speeds – starting with one-second block times, with the goal of cutting this down to 250 milliseconds.

“This is a game-changer for the quick trading and liquidity activities that Uniswap users are accustomed to. Plus, by making Unichain permissionless right from the start, Uniswap stays true to its roots of being open and community-driven.”

The Bottom Line

Unichain is a big deal for Uniswap, tackling high fees, slow transactions, and liquidity fragmentation while keeping the platform fast, cost-effective, and permissionless.

Unichain expects Uniswap with all the necessary tools to lead the next era of decentralized finance.

 

Source: https://www.techopedia.com/uniswap-launches-unichain-l2-all-you-need-to-know

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Crypto insurance: Do you need one in 2024?

Crypto insurance: Do you need one in 2024?

Obviously, the decentralized finance (DeFi) industry is not going to stand still, as new projects and innovative financial instruments are constantly entering the market, and user adoption is increasing.

According to Triple-A estimates, there will be around 560 million cryptocurrency users worldwide in 2024. The number could be higher, as accurate determination is difficult due to the decentralized nature of cryptocurrencies.

However, the more the crypto industry expands, the more vulnerable it becomes to hacking and exploitation.

According to data published by TRM on June 24, 2024, the value of stolen cryptocurrencies doubled from $657 million to $1.38 billion within a year by June 24, 2024. Such a sharp increase could prompt crypto investors to consider purchasing crypto insurance.

One notable project in this space is 99Bitcoins, which aims to enhance security awareness and provide educational resources to help users understand the importance of protecting their digital assets.

By offering comprehensive guides and tools, 99Bitcoins empowers users to take proactive measures in securing their investments, thereby complementing the role of crypto insurance.

What is Crypto Insurance and How Does it Work?

Essentially, crypto insurance follows the same principles of effective risk management as traditional insurance, says Joseph Ziolkowski, CEO and co-founder of Relm Insurance, an insurance provider specializing in the digital assets and Web3 industries.

The main focus of crypto insurance is to protect crypto holders and businesses from risks such as theft, hacking, and technical failure. They provide financial protection for damage caused by such incidents and form a safety net.

However, due to the volatile nature of DeFi, cryptocurrency insurance coverage could tide over fluctuating market movements or accidental user errors, added Anndy Lian, an intergovernmental blockchain consultant.

In addition, Lian introduced the idea of ​​DeFi insurance, explaining that it uses blockchain technology to create a community-run pool for covering losses, eliminating the need for a traditional insurance company.

Demand for Crypto Insurance is Increasing

With the increase in cyberattacks on crypto exchanges and wallets, the demand for crypto insurance has certainly increased significantly, which also coincides with the overall growth and acceptance of the cryptocurrency industry.

Relm Insurance’s Ziolkowski noted that the company has observed significant growth in the crypto insurance market, especially following the introduction of new regulations and due to the ecosystem’s continuous development of innovative solutions.

He said: “Demand for crypto insurance has remained consistently strong and has proven its resilience even in bear markets. Due to this high demand, Relm has launched a Web3 product range that offers tailored and comprehensive insurance coverage for clients exploring or using Web3 technologies.”

“Our five distinct products directly address the nuanced risks faced by cryptocurrency exchanges, asset managers, technology developers, miners, token issuers, institutional staking providers, and other entities operating in the ecosystem.”

However, according to Ziolkowski, the increasing number of insurance claims also means that insurers are less willing to cover these types of risks.

Protection from the Wild West of Crypto Risks

Unlike traditional insurance, crypto insurance focuses on eliminating specific threats that the crypto industry is more vulnerable to, such as theft and hacking, loss of crypto and keys, and cyber and technical errors and omissions.

Lian described cryptocurrency insurance coverage as protection “against the Wild West of cryptocurrency risks,” noting that some of the most popular solutions include protection against hacking and theft.

This covers and protects crypto assets stolen during a security breach, as well as the loss of custodians due to accidental loss or loss caused by a technical malfunction.

Relm Insurance’s Ziolkowski further explained that some of the most common types of crypto insurance include directors and officers (D&O), cyber and technology professional liability, and investment manager insurance.

D&O insurance protects crypto companies and their executives from lawsuits, typically resulting from alleged mismanagement, and includes three levels of coverage:

The protection of individual directors if they are sued and the company cannot compensate them.

Reimbursement of costs incurred by the company in naming executives in legal proceedings.

Covering the company’s expenses if both the company and its executives are sued.

The cyber and technology professional covers technology-related liabilities specified in contracts.

Finally, the Investment Managers Insurance Coverage provides special coverage for investment managers who oversee cryptocurrency assets.

It typically includes protection against claims arising from professional error, mismanagement, breach of fiduciary duty, and violation of regulations.

It can cover legal defense costs, settlements, and damages and protect both the managers and the investment firm from financial losses due to these risks.

Crypto Insurance Companies “In Cahoots” With Regulators

According to Relm Insurance’s Ziolkowski, Relm works with regulators around the world to address the insurance requirements embedded in their respective legal frameworks.

“It is crucial to recognize the considerable differences in these requirements: some countries require only a single type of insurance, while others require eight or more types of insurance.”

Ziolkowski cited Hong Kong as an example, where 50% of all assets held in custody must be insured – a requirement that is not applied uniformly in all regulations.

Such regional differences underscore the evolving landscape of regulatory frameworks in which insurance mandates are increasingly creating credibility and legitimacy within the crypto industry.

Lian added that regulatory frameworks can often influence the types of risks covered by crypto-insurance, highlighting the importance of collaboration.

“For example, regulations addressing smart contract vulnerabilities could pave the way for insurance against bugs or exploits within these digital agreements. Conversely, a lack of regulations for certain crypto activities could result in them not being covered by insurance.”

Crypto Insurance: A Promising Concept?

Lian stressed that crypto insurance is “a promising concept, but it is still uncharted territory.”

“Unlike traditional insurance, which relies on decades of data, the new and ever-changing landscape of cryptocurrencies makes it difficult for insurers to assess risk and set fair prices for insurance coverage.”

Furthermore, the decentralized nature of cryptocurrencies clashes with traditional insurance models, which could make insuring digital assets somewhat more challenging, as they are often distributed across a number of digital wallets.

Relm Insurance’s Ziolkowski highlighted that a striking trend Relm is observing is the increasing demand for higher coverage amounts in slashing insurance, reflecting increased risk awareness and exposure.

“In addition, there is a remarkable increase in dynamic insurance offerings entering the market due to customer innovation. Companies’ risks are growing at a pace that far exceeds that of the traditional financial world.”

Therefore, cryptocurrency insurance could experience even more growth in the future.

Conclusion

Crypto insurance has become a crucial component in the rapidly evolving digital asset and DeFi industry.

As the number of users and the value of digital assets continue to grow, so does the potential for risks such as hacking, theft, and regulatory challenges, forcing more and more investors to consider options for protecting their investments.

Despite the challenges of insuring digital assets in a decentralized and volatile environment, the demand for comprehensive insurance coverage is growing.

By collaborating with regulators and developing innovative products, the crypto insurance sector will play a critical role in securing the future of digital finance.

As the industry matures, the protection offered by crypto insurance will be essential to promoting trust and stability in the crypto world.

 

Source: https://usa.inquirer.net/154627/crypto-insurance-do-you-need-one-in-2024

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j