Artificial Intelligence in the Cryptocurrency Ecosystem: Crime Mechanisms, Detection Strategies, and Legal Perspectives

Abstract

This chapter explores the intersection of cryptocurrency crime and artificial intelligence (AI), highlighting both the threats posed by AI-driven cybercriminal activities and the potential of AI-based countermeasures. Cybercriminals increasingly leverage AI for money laundering, fraud, market manipulation, ransomware attacks, and identity theft, exploiting vulnerabilities in smart contracts and decentralized finance (DeFi) platforms. Conversely, AI is a powerful tool for combating these threats, aiding in blockchain analysis, anomaly detection, and Anti-Money Laundering (AML) enforcement. Advanced machine learning models enhance Know Your Customer (KYC) protocols and enable predictive crime prevention by analyzing transactional patterns. Additionally, this chapter examines challenges such as regulatory loopholes, adversarial AI, and jurisdictional complexities. The future implications of AI in financial crime prevention, including the role of quantum computing and emerging financial technologies, are also discussed.