# kaal:claim:5245185-029

**Claim.** Claims that centralized AI ensures KYC and AML compliance are circular, because they rely on AI to interpret the very regulations that AI may itself violate.

**Type.** failure  **Support.** argued

**Holds when.**

- AI driven compliance interpretation for KYC and AML

**Source quote.**

> the assertion that centralized AI ensures compliance with KYC and AML standards overlooks the circularity of relying on AI to interpret regulations it may itself violate.

**From.** Wulf A. Kaal, *How can we Best Monitor AI Agents* (2025), 6.3.2. Insufficient Adaptability: Static Centralization vs. Dynamic Evolution, page 13

**Cite as.** Wulf A. Kaal, How can we Best Monitor AI Agents (2025). SSRN: https://ssrn.com/abstract=5245185

**Verify.** sha256 of source PDF `4d7adba83ec722480e97bde6528cbe9ce98c709e45cb18794f157a64b8fe7da2` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20How%20can%20we%20Best%20Monitor%20AI%20Agents.pdf

**Failure mode.** compliance-circularity  (family: ai-oversight-and-alignment-gap)

**Topics.** compliance, decentralization, ai-and-agents

**Keywords.** kyc-aml, compliance-circularity, centralized-ai, regulatory-interpretation

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