CFTC to Leverage AI in Reviewing US Crypto Registration Applications

The US Commodity Futures Trading Commission, known for its openness to digital assets, is 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 speak at Consensus 2026, mentioned that AI and automation will help offset personnel cuts implemented under President Donald Trump's initiative to reduce federal staffing. The agency, poised to become a leading regulator in the US crypto sector, is working towards utilizing AI to review registration applications and aid in market surveillance. Currently, the CFTC's registration process involves manual document submission, which Selig aims to automate for greater efficiency. AI tools will be used to review applications, flag issues for staff, and accelerate the feedback process. The agency is also developing in-house tools for reviewing swap data and market surveillance, leveraging technology such as Microsoft's Copilot. Selig emphasized the importance of embracing technology, citing the agency's efforts to oversee emerging technologies, including crypto and prediction markets. A significant 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. The CFTC is also taking action to police fraud and manipulation in crypto markets. Furthermore, Selig has been involved in a contentious issue regarding prediction markets, asserting the CFTC's exclusive jurisdiction over these firms. The agency has sued several states and is actively monitoring and taking action against bad actors in these markets.