Modern Jurisprudence and Law

Modern Jurisprudence and Law

Civil liability of artificial intelligence in automated decisions of foreign exchange market (Forex) trading systems

Authors
Mohammad Sardoui Nasab 1
mohammad mahdi Montazeri 2
1 Faculty of Public Law (Oil and Gas Law Department), Faculty of Law and Political Science, University of Tehran, Iran
2 Lawyer at a court, university lecturer, Master of Private Law, University of Tehran, Iran
10.22034/jml.2026.731256
Abstract
The rapid and extensive developments in emerging technologies—particularly artificial intelligence—have led to the application of such technologies in complex domains, including financial and trading markets. One of the most prominent manifestations of this transformation is the emergence of AI-based trading systems in the foreign exchange market, which, using advanced algorithms, make real-time and automated trading decisions. Although these systems have improved speed, accuracy, and reduced transaction costs, they have also raised significant questions and challenges within private law, particularly in the realm of civil liability. When these systems cause damage due to flawed analysis or erroneous decision-making, it remains unclear who should be held accountable: the algorithm designer, the system operator, the human supervisor, or the system itself.This article aims to clarify the legal status of civil liability arising from the autonomous decisions of AI trading systems in currency markets. It first explores the fundamental concepts of civil liability and artificial intelligence, followed by an analysis of the structure and operation of automated trading platforms. Drawing upon legal principles, scholarly opinions, and a comparative study of advanced legal systems, the article seeks to propose an appropriate framework for attributing liability for damages caused by such systems. Emphasizing the absence of specific regulations within Iran’s legal system, the article highlights the urgent need to revise traditional civil liability doctrines and enact tailored legislation to address this emerging phenomenon. Finally, it presents practical recommendations for regulating the legal relationship among users, developers, and supervisors of intelligent trading systems, ensuring both legal accountability and continued technological innovation.
 
Keywords
civil liability . artificial intelligence . algorithmic error . automated decision-making . foreign exchange market

Subjects