US Crypto Regulatory Body to Leverage AI for Application Review

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. In an interview with CoinDesk, Chairman Mike Selig discussed the agency's plans to utilize AI and automation to make up for personnel cuts, as part of President Donald Trump's efforts to reduce federal staffing. The CFTC, poised to become a leading regulator in the US crypto sector, is working towards implementing AI technology 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 provide faster feedback. The agency is also building in-house tools for reviewing swap data and market surveillance purposes, and staff are being trained on using Microsoft's Copilot. One of Selig's key initiatives has been overseeing the crypto industry, including the development of a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. The CFTC has also been involved in the regulation of prediction markets, with Selig taking a firm stance on the agency's exclusive jurisdiction over these businesses. The agency has taken action against bad actors in the markets and will continue to monitor and enforce regulations in the crypto and prediction markets sectors.