US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its embrace of 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 review registration applications and assist in market surveillance, thereby improving efficiency. The current manual document submission process for registration is being revamped to incorporate automated systems, enabling AI tools to review applications, identify issues, and prioritize tasks for staff, ultimately streamlining the feedback and rejection process. The CFTC is also investing in in-house tools for reviewing swap data and market surveillance, with staff currently undergoing training on Microsoft's Copilot. Under Selig's leadership, the agency has made significant strides in overseeing emerging technologies, including crypto and prediction markets. A notable initiative has been the establishment of a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. Furthermore, the CFTC has taken a strong stance on policing fraud and manipulation in crypto markets, and has been involved in contentious cases regarding prediction markets, asserting its exclusive jurisdiction over these firms.