Gaps in Algorithmic AI Audits: Legal and Transparency Issues in Cryptocurrency Trading

Abstract This study aims to examine the role of Artificial Intelligence (AI) in crypto trading and the legal and technical issues that arise, as well as to formulate an ideal regulatory and supervisory framework. The method used is a doctrinal approach with comparison, comparing Indonesia and the European Union (EU) to evaluate the applicable regulations and supervision. The results show that the current regulatory and supervisory framework is inadequate to address the challenges of AI auditing in cryptocurrency trading. The EU regulates a risk-based approach, algorithmic auditing, and product liability regulations relevant to AI governance. Meanwhile, AI regulations in Indonesia are still under development and implement a centralized strategy led by the government, linking AI application to national strategic objectives, and are currently based on AI Ethics Guidelines. In terms of regulatory compliance, there is a need to develop and harmonize structured AI audit standards and AI transparency, as well as implement efficient regulatory technology (RegTech) and supervisory technology (SupTech), such as the Financial Services Authority SupTech Integrated Data Analytics (OSIDA) system. There is a need to strengthen and harmonize technology-based legal and supervisory frameworks so that AI in crypto trading becomes transparent and accountable.