The 2010 Flash Crash wasn't a particularly glorious moment for the finance community. The search for culprits led to Navinder Singh Sarao , who ended up pleading guilty of spoofing (as well as of wire-fraud). As any high-frequency trader will tell you, spoofing, i.e. "placing bids with the intention of canceling them before they are executed", is a felony.
Now, let us consider the scenario sketched in my previous post and consider an AI-agent, let's say a dml-game-theoretic algorithm trained to maximize profits in a competitive environment . Will it spoof? Will it place "bids with the intention of canceling them before they are executed"?
Lawyers take note. AI-forensics is in its infancy (think of the Tesla car crash), but it will grow fast.
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