Designing Inclusive Crypto-Asset Dispute Resolution A Hybrid AI and Smart Contract Online Dispute Resolution Framework for Vulnerable Users

Abstract

The growing use of crypto-assets has generated disputes that sit uneasily within existing legal redress mechanisms. Their resolution is complicated by the technical features of blockchain transactions, the cross-border nature of many relationships, and fragmented legal rules. These difficulties are particularly acute for users without legal or technical expertise, who may struggle to identify their rights, organise relevant evidence, or pursue an effective remedy. Crypto-assets may therefore produce new forms of digital exclusion, despite their association with financial accessibility. This paper examines whether a hybrid Online Dispute Resolution framework combining artificial intelligence and blockchain-based smart contracts could mitigate these barriers. In the proposed model, AI operates primarily off-chain, supporting natural-language interaction, dispute classification, evidence organisation, and accessible legal information. Smart contracts perform limited on-chain functions, including dispute registration, timestamping, verification, escrow management, and, where appropriate, execution of agreed outcomes. The framework is human-centred, with emphasis on explainability, procedural guidance, and human oversight in complex cases. The model is examined through disputes involving crypto-asset seizure, exchange failures, and cross-border scams. The paper argues that a carefully delimited hybrid architecture may improve accessibility, transparency, efficiency, and enforceability, provided that automated and human roles are clearly defined. It also addresses key legal and governance concerns, including algorithmic bias, liability, data protection, smart-contract enforceability, and compliance with the EU AI Act and the Markets in Crypto-Assets Regulation. The paper thus proposes a legally grounded framework for more inclusive and robust dispute resolution in crypto-asset environments.