US Regulator CFTC to Utilize AI for Crypto Application Reviews

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. Chairman Mike Selig revealed in an interview that the agency is leveraging AI and automation to compensate for staff cuts implemented under President Donald Trump's initiative to reduce federal personnel. Selig, who is set to speak at Consensus 2026, emphasized the CFTC's push to utilize technology for reviewing registration applications and aiding in market surveillance, aiming to become a leading US regulator in the crypto sector. The current manual registration process is being overhauled with automated systems to improve efficiency. AI tools will be employed to review applications, flag issues for staff, and accelerate feedback and rejection processes for incomplete submissions. The agency is training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance, demonstrating its commitment to embracing technology. Under Selig's four-month tenure, the CFTC has made significant strides in overseeing emerging technologies, including crypto and prediction markets. A key 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 enable market participants and consumers to engage with crypto systems confidently, knowing they are not inadvertently violating securities laws. The CFTC is also taking 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 asserting the CFTC's exclusive jurisdiction over these businesses. The regulator has sued several states challenging companies for violating state gaming laws and has joined a Department of Justice case against an individual accused of insider trading in prediction markets. Selig emphasized the agency's commitment to enforcing regulations and taking action against bad actors in the markets, signaling a serious stance on these issues.