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They can't regulate finance, they can't regulate AI either.

Um, they can regulate finance. Ask Bernie Madoff and that crypto guy lol

Madoff pulled a ponzi scheme for years, despite multiple complaints filed by third parties to the SEC. At the end the 2008 crisis brought him down, his victims lost their money and the SEC just tagged the bodies it found.

Same goes for the crypto guy, did regulations stop him from defrauding billions and hurting thousands of victims?

Nonetheless Madoff was caught, convicted, sent to prison, and died there.

Regulations sure aren't perfect, but that doesn't mean they don't exist or have no effect.

In this case they do create moral hazards though. The regulation means investors are less likely to consider a ponzi scheme as an outcome of their investment, so they don't conduct due diligence as thoroughly.

The original Ponzi was brought down by the free markets: a journalist caught wind of unbelievable returns and tracked down why.

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