CFTC to Utilize AI for Reviewing US Crypto Registration Applications

The US Commodity Futures Trading Commission, known for its embracing stance on digital assets, is now turning to artificial intelligence to compensate for the loss of over a fifth of its workforce, according to Chairman Mike Selig. In an interview with CoinDesk, Selig, who is scheduled to appear at Consensus 2026 in Miami, mentioned that AI and automation will help make up for the personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The agency, which is poised to become a leading US regulator for the crypto sector, is working towards leveraging technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but Selig stated that they are 'building out systems to automate that, to make it much more efficient.' AI tools can review applications, flag issues for staff, and make their jobs easier and faster, while also rejecting incomplete or inaccurate submissions. Selig's staff is being trained on using Microsoft's Copilot, and the agency is developing in-house tools for reviewing swap data and market surveillance. Since taking the helm of the US derivatives regulator four months ago, Selig has led the charge into emerging technologies, including oversight of crypto and prediction markets. One major 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 allow market participants to engage with crypto systems confidently, knowing they are not inadvertently violating securities laws. The CFTC will take action to police fraud, manipulation, and insider trading in crypto markets. However, Selig's stance on prediction markets has been contentious, particularly with states challenging companies like Kalshi and Polymarket for violating state gaming laws. The CFTC has sued several states, defending its 'exclusive jurisdiction' over these firms. Recently, the agency joined a Department of Justice case against a US Army Special Forces soldier accused of placing prediction-market bets using confidential government information. Selig emphasized the CFTC's commitment to enforcing regulations and taking action against bad actors in the markets.