US Crypto Regulatory Body to Leverage AI for Application Reviews

The US Commodity Futures Trading Commission, known for its open approach to digital assets, is now turning to artificial intelligence to offset the impact of significant workforce reductions. Chairman Mike Selig, set to speak at Consensus 2026, highlighted the agency's efforts to utilize AI and automation to compensate for personnel cuts resulting from President Donald Trump's initiative to reduce federal staffing. The CFTC, poised to become a leading regulator in the US crypto sector, is working towards employing AI to review registration applications and support market surveillance. Currently, the registration process involves manual document submission, but the agency is developing systems to automate this process, making it more efficient. AI tools will be used to review applications, flag issues for staff, and accelerate the feedback process. The agency is also training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Chairman Selig emphasized the importance of oversight in the crypto industry, citing the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets. This system of definitions will enable market participants to engage with crypto systems confidently, knowing they are not violating securities laws. The CFTC will focus on policing fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in the regulation of prediction markets, which has been a contentious issue, with the CFTC asserting its exclusive jurisdiction over these firms. The agency has taken enforcement actions against bad actors in the prediction markets and will continue to monitor the space seriously.