According to @DowdEdward, AI hallucinations can be costly in finance, underscoring material operational and execution risk if unverified model outputs influence trading decisions; source: Edward Dowd on X twitter.com/DowdEdward/status/1981084761746784418. Standards bodies warn that erroneous AI outputs degrade decision quality and can harm consumers, reinforcing the need for human oversight, rigorous testing, and continuous monitoring in trading workflows; sources: NIST AI Risk Management Framework 1.0 nist.gov/itl/ai-risk-management-framework and IOSCO Guidance on AI and Machine Learning in Securities Markets (2020) iosco.org/library/pubdocs/pdf/IOSCOPD658.pdf. For crypto and equity markets, similar AI risks in signal generation, portfolio construction, and order routing can translate into execution errors and market integrity issues, a concern echoed by U.S. SEC Chair Gary Gensler regarding AI-driven herding and systemic risk; sources: IOSCO AI and ML guidance (2020) iosco.org/library/pubdocs/pdf/IOSCOPD658.pdf and SEC remarks by Chair Gary Gensler on AI and systemic risk, July 17, 2023 sec.gov.