Why Crypto Companies are Embracing AI
As the artificial intelligence (AI) market continues to grow, crypto-focused companies are finding ways to incorporate AI into their products. Jacqueline Burns-Koven, head of cyber threat intelligence for Chainalysis, explained that AI can improve compliance, risk assessment, investigations, and overall efficiency for businesses. ZenLedger, a crypto tax software provider, has partnered with april, an AI-powered financial company, to simplify the tax filing process for users. Daniel Marcous, CTO and co-founder of april, highlighted how AI has been instrumental in building a tax product that covers income from crypto and digital assets.
In the decentralized finance (DeFi) space, AI is being used to power various use cases. Nick Emmons, CEO of Upshot, discussed how AI models can create efficiencies in price feeds for long-tail crypto assets and enable the expansion of the digital asset universe. Additionally, AI-powered DeFi vaults are being developed to optimize on-chain activities.
Challenges of Combining AI with Crypto
While the integration of AI into crypto products offers benefits, there are challenges to consider. Trustworthiness of creators behind AI models is crucial to avoid bias and manipulation. Emmons emphasized the need for decentralized AI stacks that promote transparency and accountability. ZK proofs can also be used to verify machine learning models. However, regulatory frameworks for AI usage remain limited, making it difficult to determine if AI is being utilized in users’ best interests.
Some countries have taken steps towards establishing regulations for AI. The United Arab Emirates recently formed the Artificial Intelligence and Advanced Technology Council (AIATC), while in the United States, SEC Chair Gary Gensler has raised concerns about the risks associated with AI in finance.
Hot Take: The Future of AI in Crypto
Despite ongoing challenges, the incorporation of AI into the crypto sector is expected to continue. Emmons believes that AI will eventually become a critical component of society and predicts that the crypto industry will adopt AI models already used in traditional finance. As the market evolves, regulatory clarity and advancements in cryptographic tooling will likely play a significant role in shaping the future of AI in the crypto space.
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