US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its openness to digital assets, is turning to artificial intelligence to offset the impact of significant workforce reductions, according to Chairman Mike Selig. In an interview, Selig, who is set to speak at Consensus 2026, mentioned that AI and automation will help compensate for personnel cuts as part of President Donald Trump's initiative to reduce federal staffing. The agency, poised to become a leading regulator in the US crypto sector, is moving towards using technology to review registration applications and aid in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but Selig noted that they are developing systems to automate this process, making it more efficient. AI tools will be used to review applications, flag issues for staff, and speed up feedback and rejection processes for incomplete or inaccurate submissions. The chairman also mentioned that his staff is being trained on Microsoft's Copilot and that the agency is creating in-house tools for reviewing swap data and market surveillance purposes. Under Selig's four-month tenure, the agency has jumped into regulating emerging technologies, including crypto and prediction markets. A significant initiative has been the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets, providing clarity on regulatory jurisdictions. This development is expected to allow market participants to engage with crypto systems confidently. The CFTC is also taking action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in regulating prediction markets, which has been contentious, with the CFTC asserting its exclusive jurisdiction over these firms. The agency has sued several states and is taking enforcement action against bad actors in these markets, demonstrating its commitment to regulating the space.