- Malta recently passed three bills into law, one of which potentially makes AI legal citizens.
- “An AI controlled DAO would need to be adapted to operate under the new framework, but the result might actually be a more controlled and less risky environment,” said Alberto Pelliccione – ReaQta CEO – in an exclusive interview with BitStarz.
- AI still has a long way to go before it can be deemed truly powerful, so if strict regulations and rules are put in place, AI can be prevented from being used in negative ways.
At the start of July, Malta passed three crypto-friendly bills into law – a move that has been widely welcomed by the crypto community. However, nestled among those bills was an interesting section that touches on AI. These new AI regulations pose an interesting opportunity, and possibly threaten society. Under the new rules, AI could essentially buy land or property, tokenize it, and sell those tokens to other AI systems. This could pose a threat to civilization as we know it, so we got in touch with Maltese computer and network security firm ReaQta.
ReaQta develops an innovative endpoint threat response platform powered by AI, so it’s safe to say that it’s a company that has a story to tell. We were able to speak to ReaQta co-founder and CEO Alberto Pelliccione to see what he had to say about the new regulations in Malta, along with the company’s future plans.
How do you feel about the new regulations in Malta?
ReaQta operates almost entirely in the AI field targeted at cyber security – while the new regulation applies mainly to DLT – so it should have no major impact on what we do. That being said, I believe it’s a brave first step into regulating a set of technologies that are gaining incredible traction but that have been – so far – unregulated. I don’t mean it in a derogatory way, but when people’s savings are on the line, transparency and accountability become necessary to ensure – or at least limit – any wrongdoing. In the way the new regulations have been established there appears to be a good balance between the need of agility to innovate and the necessity to protect consumers. The new framework will have to stand the test of time, but it’s certainly a very welcome beginning for this young industry.
Today cryptocurrency exchanges are a security nightmare for investors and they represent a lucrative venture for cybercriminals. These groups are capable of accessing a large amount of assets in a very uncontrolled environment, so I hope that one of the immediate results of the new laws will be that the industry is forced to offer a much more secure and reliable experience to all the investors that are betting on cryptocurrencies for the long term.
Are you planning on integrating Blockchain into your software solutions?
Yes, we do expect to integrate the blockchain in our enterprise solution, mainly to guarantee that access to the data we acquire can always be transparently audited and reviewed. This won’t be a consumer facing development, but more of an assurance framework we would like to put in place to guarantee transparency and accountability to the entities that are using not only our platform, but also our services worldwide.
Do you think an AI controlled DAO (Decentralized Autonomous Organization) could pose a security risk via Malta’s new laws?
A DAO that is fully AI controlled would have to operate under the parameters of the new framework just approved. The goal of the new bills is not to hamper smart applications that make use of AI, but to bring order to chaos in an effort to protect consumers and investors, as well as assigning the correct liabilities where these are due. An AI controlled DAO would need to be adapted to operate under the new framework, but the result might actually be a more controlled and less risky environment. In fact, the law is not forbidding – to the best of my knowledge – any application of AI that would otherwise be available on the unregulated market.
What do you feel the Implications of AI – through a DAO – purchasing tangible objects such as land or property could mean for Malta and the EU?
This would be an incredibly interesting scenario that requires consultation from multiple parties, both on the legal and technological side. It would probably be the first case of an AI, which we can describe as a digital entity – at least to some extent – owning a tangible asset. Does the AI operates through a DAO autonomously? Or does it represent a set of investors? Who would be ultimate beneficiary of this newly acquired ownership? That’s an interesting topic that extends well beyond just Malta or the EU, it should involve the community at large as the ramifications will be numerous and not obvious or immediately clear.
With AI in general – and not necessarily related to cryptocurrencies or the financial market – we are venturing into an unknown territory and we don’t yet have a clear view of where we will be eventually led, how we will get there and in what way it will affect us. We are still lacking a legal framework to define exactly what an AI is, if an AI individual can own goods or if an AI has a right to property at all. These are all topics that are being discussed by different organizations around the world and there’s isn’t yet a unified view on how we will treat a phenomenon that is expected to emerge relatively soon.
Do you think AI has the ability to go rogue?
Yes of course, the primary concern of AI today is predicting how and when it can go rogue. Algorithms are driven by goals set by humans, but when the algorithms become completely autonomous then we lose our ability to control their goals. This presents a problem if us – or our technologies – happen to be in the way. Certainly the AI will do whatever it can to get rid of the problems in its path. This doesn’t mean the future of AI will be bad, but there is space for bad things to happen that we might be unable to control.
At ReaQta we ran various cybersecurity related experiments, applying the best AI algorithms available today to hack computer systems. While these experiments are just prototypes, that are not yet practical in the real world. The results show that the capabilities are there for this type of attack and in the near future it will be possible to leverage autonomous and self-learning systems to gain an advantage over existing and more traditional technologies, including of course applications of the blockchain or the wider financial markets.
Could we see a world where AI purchases real estate via a DAO, tokenizes it, and then sells it to other DAOs controlled by AI?
Not only can I see it happening, but I expect it to happen at some point in the future that is not distant at all. Think about the applications of algorithms in HFT (High Frequency Trading) and how they control the traditional financial market, both on the good and bad side (like machine-driven flash crashes). The extension of AI to a DAO will come as natural progression and the consequences could have profound implications.
As long as AI is controlled, this will mean better deals for humans and value extracted in a more efficient way, but the tables might be turned once the AI is in complete control. This has already happened to a lesser extent with robo-traders becoming autonomous and making all the decisions. If the AI is truly smart, human operators won’t be able to compete efficiently anymore, leading to an AI vs AI market that will become increasingly more difficult for us to understand.
Driven to an extreme, we might even see an AI using what it has learned to exploit humans and “steal” our digital assets – similarly to what happens when an amateur plays against a seasoned player in any sport, only that the gap between the amateur and the pro in the AI world would be so much wider than that between human and human.
Do you think these new laws will help Malta stand out as a hub for AI developers?
The new laws are designed for a slightly different market, although they’ve been designed to be extended and later on sure enough will include AI. First of all, we have to understand the impact of the new regulations and how well it will work, how it will protect consumers and how well it will manage to reassure buyers that they’re dealing in a safer environment. There will be new iterations over the years as the framework will be adjusted to face a very dynamic environment and a fast-evolving technology, at that point AI will only become a natural part of it. Whether it will drive Malta to become a hub for AI developers is hard to say at the moment, but the regulations will certainly play an important role – I cannot predict in which way just yet.
For now, it sounds as if we are safe from a rogue computer takeover, as we have experts like Alberto Pelliccione and the team at ReaQta using AI to protect us all. Head over to their website to keep up to date with the latest AI developments from ReaQta. As always, stay tuned to the BitStarz News for more exclusive interviews with industry experts.
