US Crypto Regulatory Body to Utilize AI in Reviewing Registration Applications

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now embracing artificial intelligence to compensate for the reduction in its workforce, according to Chairman Mike Selig. In an interview with CoinDesk, Selig stated that the agency is leveraging AI and automation to make up for personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The CFTC, which is poised to become a leading regulator in the US crypto sector, is working towards utilizing technology to review registration applications and assist in market surveillance. Currently, the registration process relies on manual document submission, but the agency is building systems to automate this process, making it more efficient. AI tools can review applications, flag certain issues for staff, and make their jobs easier by providing faster feedback and rejecting incomplete applications. Selig mentioned that his staff is being trained on using Microsoft's Copilot and 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 significant steps in overseeing emerging technologies, including crypto and prediction markets. One major initiative has been the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets, providing clarity on regulatory jurisdictions. Selig believes this development will allow market participants to engage with crypto systems confidently, knowing they are not violating securities laws. The CFTC will take action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in contentious issues surrounding prediction markets, with Selig maintaining that the CFTC has exclusive jurisdiction over these firms. The agency has sued several states and is taking action against bad actors in the markets, demonstrating its commitment to enforcement.