US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its open approach to digital assets, is now embracing artificial intelligence to compensate for a significant reduction in its workforce. According to Chairman Mike Selig, 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 working towards utilizing AI to review registration applications and aid in market surveillance. Currently, the registration process relies on 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 streamline the feedback process. The agency is also building in-house tools for reviewing swap data and market surveillance, and staff are being trained on Microsoft's Copilot. In the absence of new crypto legislation, the CFTC has issued joint guidance with the Securities and Exchange Commission to establish 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 a strong stance on prediction markets, defending its exclusive jurisdiction against state challenges.