US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its embracing stance on digital assets, is turning to artificial intelligence to compensate for a significant reduction in its workforce. Chairman Mike Selig revealed in an interview that the agency is leveraging AI and automation to make up for personnel cuts, as part of President Donald Trump's initiative to reduce federal staffing. The CFTC, poised to become a leading US regulator for the crypto sector, is exploring the use of technology to review registration applications and aid in market surveillance. Currently, the registration process relies on manual document submission, but the agency is working to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and expedite the feedback process. The agency is also developing in-house tools for reviewing swap data and market surveillance, utilizing technology such as Microsoft's Copilot. Under Selig's leadership, the CFTC has taken significant steps in overseeing emerging technologies, including crypto and prediction markets. A key initiative has been the joint guidance with the Securities and Exchange Commission, establishing a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. The agency is committed to policing fraud, manipulation, and insider trading in crypto markets, and is taking action against bad actors in the prediction markets, emphasizing its exclusive jurisdiction over these firms.