US Regulator CFTC to Utilize AI in Reviewing Crypto Registration Applications

The US Commodity Futures Trading Commission, known for its embrace of digital assets, is now turning to artificial intelligence to compensate for a significant reduction in its workforce, as stated by Chairman Mike Selig in an interview. Selig, who is scheduled to appear at Consensus 2026, mentioned that AI and automation can help offset the personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The agency, which is poised to become a leading US regulator for the crypto sector, is working towards leveraging technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but the agency is developing systems to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and make their jobs easier and faster. The agency is also training its staff to use Microsoft's Copilot and is building in-house tools for reviewing swap data and market surveillance. Selig emphasized that the agency is embracing technology, particularly in the oversight of emerging technologies like crypto and prediction markets. One of Selig's key initiatives has been to establish oversight of the crypto industry, including the development of 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 with confidence. The agency is also taking action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in regulating prediction markets, which has been a contentious issue, with the agency defending its exclusive jurisdiction over these firms. The CFTC has sued several states and has taken action against bad actors in the markets, demonstrating its commitment to enforcing regulations in the crypto and prediction markets sectors.