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Hilary J. Allen

@profhilaryallen.bsky.social

820 followers 260 following 340 posts

Law professor at the American University Washington College of Law (but all views expressed here are my own); author of Fintech Dystopia and Driverless Finance; mythbusting crypto, AI, and other fintech Internet serial: fintechdystopia.com

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Hilary J. Allen @profhilaryallen.bsky.social · Aug 29

"Let's Get Skeptical," the final chapter of Fintech Dystopia, has dropped
fintechdystopia.com/chapters/cha...
Covering
- How much the abundance agenda and VC output suck
- Silicon Valley subsidies we can take away
- How to laugh our way into Silicon Valley skepticism
- A plan to actually fix finance

A picture of Olivia Newton-John with the caption "Let's Get Skeptical"

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Hilary J. Allen @profhilaryallen.bsky.social · 22h

(I was less succinct - I wrote a whole book about it, and about how the GenAI industry is playing a very similar game:

fintechdystopia.com)

fintechdystopia.com

Hilary J. Allen @profhilaryallen.bsky.social · 22h

"Exploiting regulatory loopholes and bypassing national controls is the name of the game" with crypto.

"Crypto has never been about innovation, but about getting away with things you would not otherwise be able to."

Nice to hear someone else say it! @jemima.bsky.social

www.ft.com/content/dbd0...

Crypto skulduggery isn’t a bug, it’s the whole point

Exploiting regulatory loopholes is the name of the game

www.ft.com

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Hilary J. Allen @profhilaryallen.bsky.social · 5d

I would love to know if there's been a similar shift in sentiment re crypto and stock trading apps.

Folks will always gamble to some degree, but I suspect some gambling on crypto/stocks/sports is unenjoyable but driven by forces of economic precarity: fintechdystopia.com/chapters/cha...

Problem gambling has risen sharply in the United States in the last six years, and it’s likely to get worse as people start to feel the increased economic precarity unleashed by the “One Big Beautiful Bill” (if I wanted to be really cynical, I might suggest that a goal of that bill was to create a bigger market of desperate people for the sports betting and crypto industries to exploit…). The anti-cigarette movement was a grass roots movement motivated by the noxious health consequences of smoking and second-hand smoke, and as the health and other social costs of problem gambling become more apparent in our communities, I wouldn’t be surprised if we started to see similar growth in grass roots movements targeting online betting. If we do, we should work to make sure that speculative finance is also a target of those movements’ ire.

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Hilary J. Allen @profhilaryallen.bsky.social · 6d

In fintechdystopia.com, I stress how important it is to make fun of the Silicon Valley elite.

Today I heard Thiel is bankrolling Rogan’s Comedy Mothership in Austin, where comedians punch down, not up.

uomod.com/joe-rogans-m...

Is Thiel really behind it?

@gilduran.com @jacobsilverman.com

Joe Rogan’s Mothership Turned Austin’s Comedy Scene Into a Platform for Punching Down - UOMOD

Austin’s comedic landscape bears the stamp of Joe Rogan’s Mothership Comedy Club–a venue that traded creative risk for reactionary applause.

uomod.com

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Hilary J. Allen @profhilaryallen.bsky.social · 6d

The ideologies @xriskology.bsky.social identifies
are also motivating crypto, as I explore here: www.project-syndicate.org/commentary/u...

Hilary J. Allen @profhilaryallen.bsky.social · 7d

“bespoke legal AI tools still hallucinate an alarming amount of the time: the Lexis+ AI and Ask Practical Law AI systems produced incorrect information more than 17% of the time, while Westlaw’s AI-Assisted Research hallucinated more than 34% of the time.”

hai.stanford.edu/news/ai-tria...

AI on Trial: Legal Models Hallucinate in 1 out of 6 (or More) Benchmarking Queries | Stanford HAI

A new study reveals the need for benchmarking and public evaluations of AI tools in law.

hai.stanford.edu

Hilary J. Allen @profhilaryallen.bsky.social · 8d

It's End Times Finance!

Project Syndicate @projectsyndicate.bsky.social · 8d

With a single piece of legislation, Congress has made the US financial system more vulnerable to crises, increased the chances of government bailouts for tech platforms, and further entrenched Silicon Valley’s political power, @profhilaryallen.bsky.social warns. bit.ly/4728dfQ

America’s Crypto Apocalypse

Hilary J. Allen foresees grave risks from recent US legislation deregulating stablecoins – and from the ideology it reflects.

bit.ly

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Hilary J. Allen @profhilaryallen.bsky.social · 10d

Good article, although I have one quibble. If law is as toothless and obsolete as the article implies, why do these tech titans spend so much time and money trying to coopt the law and bend it in their favor?

Hilary J. Allen @profhilaryallen.bsky.social · 11d

This is indeed a thing I wonder:

(from fintechdystopia.com/chapters/cha...)

Wall-E was intended as a cautionary tale, but it sometimes seems like our overly optimistic friends in Silicon Valley miss the subtext and react to dystopian fictions with the response “coooooool - what if we actually did that?!”

Hilary J. Allen @profhilaryallen.bsky.social · 11d

I like it!

Hilary J. Allen @profhilaryallen.bsky.social · 11d

With both crypto and AI, there are humans involved at every level of the stack. Narratives of automation make it seem like the process is merely mechanical, but if there are humans involved, there are points for regulatory intervention (and in this case, humans who may need legal protections)

The Distributed AI Research (DAIR) Institute @dairinstitute.bsky.social · 11d

"“AI isn’t magic; it’s a pyramid scheme of human labor,” said @adiod.bsky.social , a researcher at the Distributed AI Research Institute based in Bremen, Germany. “These raters are the middle rung: invisible, essential and expendable.”

www.theguardian.com/technology/2...

How thousands of ‘overworked, underpaid’ humans train Google’s AI to seem smart

Contracted AI raters describe grueling deadlines, poor pay and opacity around work to make chatbots intelligent

www.theguardian.com

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Hilary J. Allen @profhilaryallen.bsky.social · 11d

Unfortunately, Newsom's track record on crypto doesn't inspire much confidence that he'll do the right thing on AI.

From fintechdystopia.com/chapters/cha...

California Governor Gavin Newsom signed an Executive Order in May 2022 that starts by saying that “blockchain technology has laid the foundation for a new generation of innovation” and has “the potential to reconfigure the logic and structure of the World Wide Web and its place in modern society.” It then gives a helping hand to a technology that has struggled to find real use cases by directing California’s Government Operations Agency to “explore opportunities to deploy blockchain technologies to address public-serving and emerging needs.” I’m sure overstretched government employees just loved having to come up with plausible-sounding blockchain use cases on top of everything else they had to do. Newsom followed up with an AI executive order in 2023, pushing agencies to try and come up with plausible-sounding AI use cases too – I think some people hope that California will be a bulwark against bad Federal policy, but we’re probably kidding ourselves if we think establishment California Dems are going to do much to oppose the Silicon Valley elite.

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Hilary J. Allen @profhilaryallen.bsky.social · 12d

fintechdystopia.com/chapters/int...

First, develop a business model that centers a particular technology. Tell some stories about how that technology will solve a legitimate problem (preferably using the words “democratize” and “disrupt”). Bend or break some laws with that business model, and profit from not complying with the law. Get away with bending or breaking the law, and with harming people along the way, because lawmakers and regulators are too timid to stop “innovation.” Get big enough that you can convince lawmakers and regulators to change the law so that you never have to comply with it and those who are harmed have no recourse – because you haven’t actually solved the problem, and your business model isn’t good enough to survive if you have to follow the same rules as everyone else. Bonus points if the law is changed in a way that guarantees you a monopoly or oligopoly position. Lather, rinse, repeat.

Hilary J. Allen @profhilaryallen.bsky.social · 14d

As my new paper on sandboxes explores, there’s no reason to believe that these AI sandboxes will benefit anyone other than the tech industry…

…but you probably guessed that already.

papers.ssrn.com/sol3/papers....

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Hilary J. Allen @profhilaryallen.bsky.social · 16d

Behold! Abundance at work!

WIRED @wired.com · 16d

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center. www.wired.com/story/louisi...

Louisiana Hands Meta a Tax Break and Power for Its Biggest Data Center

Mark Zuckerberg’s company faces backlash after rowing back promises to create between 300 and 500 new jobs to man its subsidiary’s new data center.

www.wired.com

Hilary J. Allen @profhilaryallen.bsky.social · 19d

Link to op-ed here:

www.ft.com/content/6a28...

Tech does not deserve special legal treatment

Pulling down regulatory barriers to aid innovation ignores the fact that they protect the public from harm

www.ft.com

Hilary J. Allen @profhilaryallen.bsky.social · 19d

Spot on, Neil Richards.

As I wrote for the FT

Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/6a2826fc-2bc8-4f1a-bb37-143b464090d0

Arguments for the tech sector’s special legal treatment are ultimately built on a paradox. Policymakers are told that any attempt to curb a technology’s harms would stifle innovation but they are also told that legal barriers are futile because progress is inevitable.

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Hilary J. Allen @profhilaryallen.bsky.social · 19d

Perhaps they might not feel the same way after they listen to the podcast that I did with Art Wilmarth and @amandalfischer.bsky.social on this issue....

creators.spotify.com/pod/profile/...

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Hilary J. Allen @profhilaryallen.bsky.social · 20d

It was great to speak with Art Wilmarth and @amandalfischer.bsky.social about crypto in 401(k) plans for the DCBar's Brief Encounters:

creators.spotify.com/pod/profile/...

Impact on retirees of Trump's 401(k) order encouraging crypto and private investments by Brief Encounters

President Trump's August 7 executive order directs the Labor Department and the Securities and Exchange Commission to issue guidance allowing employers and plan sponsors to include various private ass...

creators.spotify.com

Hilary J. Allen @profhilaryallen.bsky.social · 26d

Next Friday, I’ll be speaking about "innovation" claims in financial services at the State of Economic & Financial Policymaking Conference with the Better Markets Academic Advisory Board. You can register here if you're so inclined: bettermarkets.org/analysis/bet...

Better Markets Academic Advisory Board State of Economic & Financial Policymaking Conference | Better Markets

September 19, 2025 | 9:00am - 5:00pm EST Register to Attend Virtually Better Markets Academic Advisory Board (BMAAB) is proud to announce its first annual conference taking place in downtown Washingto...

bettermarkets.org

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Hilary J. Allen @profhilaryallen.bsky.social · 26d

In Fintech Dystopia (fintechdystopia.com/chapters/cha...), I urge people to mock tech hype mercilessly. The Center for the Alignment of AI Alignment Centers is on the job!

In the classic comedy Monty Python and the Holy Grail, King Arthur says to his knights (after a ridiculous musical number) “on second thought, let’s not go to Camelot. It is a silly place.” The goal is to change the “facts on the ground” so that everyone thinks of Silicon Valley as a silly place too.

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Hilary J. Allen @profhilaryallen.bsky.social · 26d

I would also emphasize that real ATMs let you deposit AND withdraw cash, and most Bitcoin ATMs only let you deposit cash. Good luck using Bitcoin ATMs to get any real money back.

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Hilary J. Allen @profhilaryallen.bsky.social · 28d

My draft article "Regulatory Sandboxes One Decade On" recounts our experience with fintech sandboxes to illustrate why AI sandboxes are extremely ill-advised:

papers.ssrn.com/sol3/papers....

Abstract
Regulatory sandboxes have spread like wildfire since the U.K. Financial Conduct Authority launched its sandbox for financial technology businesses (fintech) one decade ago. Despite widespread adoption, however, there is little empirical evidence available to assess whether the signature sandbox policy combination of regulatory rollbacks and regulatory guidance is in fact good policy. The empirical evidence that is available suggests that regulatory sandboxes are beneficial for the tech firms that participate in them, but tells us nothing about how regulatory sandboxes have impacted the broader enterprise of regulation, or whether the innovation generated by sandbox participants is beneficial for anyone other than the innovating firms themselves. From the outset, there were reasons to be concerned about sandboxes' deregulatory impact and grounds for skepticism about the type of regulatory learning that sandboxes would facilitate. A decade of experience with fintech sandboxes has not allayed those concerns; sometimes it has deepened them.

Careful attention to sandbox design features can mitigate some concerns, but we should not skip straight to design questions without first considering whether a regulatory sandbox is appropriate at all. A reckoning with the sandbox model is particularly necessary at this moment, when there is a push to use sandboxes to further innovation in generative artificial intelligence (AI). It is becoming increasingly clear that simply scaling up generative AI will not solve its limitations, just as it is becoming increasingly clear that generative AI tools have significant negative impacts on privacy, intellectual property rights, and our environment (among other things). In these circumstances, it seems foolhardy to rush headlong into adopting sandboxes that roll back legal protections in order to let AI thrive.

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Hilary J. Allen @profhilaryallen.bsky.social · 28d

I concur.

As I wrote in Fintech Dystopia: (fintechdystopia.com/chapters/cha...)

While lots of people are warning that the implosion of the crypto bubble could cause another financial crisis like the one we saw in 2008, I personally think that might be an overly optimistic projection. The deregulation we discussed in Chapter 8 is taking us back to the 1920s, not the 2000s, and so it’s quite possible that we’ll end up with another Great Depression on our hands.

Hilary J. Allen @profhilaryallen.bsky.social · 28d

There's also the possibility that a popping AI stock bubble will trigger it all!