EU to Impose Fines for High-Risk AI Usage

On February 2, the EU implemented a ban on AI systems deemed to pose an unacceptable risk, such as tools for manipulating people, deceiving them, or classifying them by social rating.

In March 2024, the European Union Parliament approved a comprehensive law regulating artificial intelligence, which came into effect on August 1. 

The document categorizes AI systems by risk levels:   

• Low: Models like spam filters or AI-supported video games will not be regulated; 
• Limited: Chatbots and other text and image generation systems, which must meet certain transparency requirements; 
• High: Systems used by law enforcement and government agencies, or tools for biometric identification and emotion recognition;  
• Unacceptable risk: Those that can deceive or manipulate people, or assess based on social behavior or personal qualities.

From February 2, companies must eliminate the use of AI in the last category, or face fines of up to €35 million or 7% of annual revenue.

Other restrictions will be integrated gradually:

• August 2, 2025 — provisions for regulating general-purpose AI systems; 
• August 2, 2026 — restrictive rules for “high-risk” AI systems, including biometric data, critical infrastructure, and education.

In October 2023, Ukraine’s Ministry of Digital Transformation introduced a roadmap for AI regulation to help companies prepare for the adoption of the corresponding EU act. 

Previously, Coinbase CEO Brian Armstrong spoke out against AI regulation and called for the decentralization of the industry.