UK Laws Failing to Rein In Grok’s Crypto Chaos, Warns Former Lawmaker
Britain's regulatory framework is getting left in the digital dust. A former parliamentarian just sounded the alarm, claiming current statutes are woefully inadequate for tackling the risks posed by the Grok ecosystem.
The Regulatory Gap
The critique centers on a perceived enforcement lag. Existing financial laws, designed for a pre-blockchain era, struggle to address the speed and complexity of decentralized networks like Grok. It's a classic case of analog rules failing a digital reality—leaving potential market manipulation and consumer harms in a gray zone.
A System Playing Catch-Up
Watchdogs are scrambling. The pace of innovation in crypto-assets continues to outstrip the bureaucratic machinery meant to oversee it. This isn't just about one platform; it's a systemic issue where novel financial instruments operate in a compliance twilight zone, often by design.
The call isn't for a crackdown, but for an upgrade. The argument suggests that without a legal framework that understands tokenomics and smart contracts, the UK risks both stifling innovation and failing to protect its citizens. It's a delicate balance between fostering growth and preventing the kind of wild west excesses that make traditional finance look boringly stable.
So, while the Treasury debates future rules, Grok and its peers keep building—operating in a space where the rulebook is still being written. Another day, another reminder that in crypto, the most disruptive code often bypasses the oldest laws.
Former lawmaker says the UK is behind in AI regulation
According to the former UK lawmaker, this includes the country failing to clarify what the law should classify as “intimate” imagery. Although in the US, lawmakers have described it as depicting nudity or underwear, backbenchers and ministers have argued that the creation of non-consensual images of women and children in bikinis and wet T-shirts using Grok shows a significant weakness in the approach.
Technology secretary Liz Kendall has also noted that the law is being aimed at nudification applications and may not even apply to Grok. According to Clare McGlynn, a professor of law at Durham University, the nudification ban is not a solution that will tackle the generation of sexual images with Grok, noting that it won’t even apply to the chatbot. The offense is designed to apply only to applications developed for the creation of non-consensual intimate imagery.
On the other hand, Grok is seen as a general-purpose artificial intelligence model capable of predicting images, text, and code, and WOULD most likely be outside the scope of the law. In a letter to Labour MP Chi Onwurah, Kendall mentioned that Grok might not be covered under the proposals. She mentioned that during the analysis, they identified that not all chatbots were covered under the scope of the law. However, she noted that officials have been commissioned to look into it so as to address the gap.
Experts warn about the risks of AI chatbots
Last Wednesday, X released a statement, noting that it would geoblock the ability for users to generate images of real people in skimpy outfits, like bikinis, underwear, and similar attire, in areas where it is currently illegal. It remains to be seen if similar images can still be generated using the standalone Grok application or the website. xAI, Grok’s parent company, did not disclose if that would be the case or if the enforcement would cover these parts.
The debate is unfolding against rising concerns about violence against women and girls (VAWG) carried out using technologies. Reports claim that around one in 10 recorded offenses involving VAWG already has a digital element, something that experts believe significantly underestimates the true scale. Younger people are prone to more risks as they spend more time online. According to campaigners, artificial intelligence can be a harm accelerant.
The group also mentioned that AI allows abuse to be generated and shared on a larger scale. Meanwhile, experts have warned that other AI-chatbot controversies are likely to emerge in the future. Michael Birtwistle, associate director at the ADA Lovelace Institute, an AI research body, mentioned that future flashpoints could include children being targeted with sexual interactions from chatbots or AI assistants dispensing questionable health or financial advice to their users.
The smartest crypto minds already read our newsletter. Want in? Join them.
