US Crypto Regulatory Body to Leverage AI for Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now exploring the use of artificial intelligence to compensate for its reduced workforce, as stated by Chairman Mike Selig in an interview with CoinDesk. Selig, who is scheduled to speak at Consensus 2026 in Miami, mentioned that AI and automation will help offset personnel cuts resulting from President Donald Trump's efforts to decrease federal staffing. The agency, which is poised to become a leading US regulator for the crypto sector, is working towards utilizing technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but Selig noted that they are 'building out systems to automate that, making it much more efficient.' AI tools can review applications, flag certain issues for staff, and make their jobs easier and faster, providing feedback and rejecting incomplete applications. Selig's staff is being trained on Microsoft's Copilot, and the agency is also developing in-house tools for reviewing swap data and market surveillance. The chairman has been at the helm of the US derivatives regulator for four months and has taken a proactive approach to emerging technologies, including crypto and prediction markets oversight. One of Selig's key initiatives has been to establish oversight of the crypto industry, including a joint guidance with the Securities and Exchange Commission to create a 'taxonomy' for digital assets. This system of definitions will help market participants, software developers, and consumers engage with crypto systems and assets confidently. Selig emphasized that this development will allow the CFTC to police fraud, manipulation, and insider trading in crypto markets. However, his stance on prediction markets has been contentious, particularly with regards to companies like Kalshi, Polymarket, Crypto.com, Coinbase, and Gemini. The CFTC has sued several states, asserting its 'exclusive jurisdiction' over these firms. Recently, the agency joined a Department of Justice case against a US Army soldier accused of placing prediction-market bets using confidential government information. Selig reiterated that the CFTC will take action against bad actors in the markets and is committed to enforcing regulations.