US Regulator CFTC to Utilize AI for Reviewing Crypto Registration Applications

The US Commodity Futures Trading Commission, known for its open approach 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 appear at Consensus 2026, mentioned that AI and automation will help counterbalance the staff cuts implemented under President Donald Trump's initiative 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 the agency is developing systems to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and make their jobs easier and faster, allowing them to provide feedback and reject incomplete applications. Selig's staff is being trained to use Microsoft's Copilot, and the agency is also creating in-house tools for reviewing swap data and market surveillance. The chairman has been at the helm of the US derivatives regulator for four months and has made significant strides in embracing emerging technologies, including oversight of crypto and prediction markets. One of Selig's key initiatives has been to establish oversight of the crypto industry, and to that end, the CFTC has issued joint guidance with the Securities and Exchange Commission to create a taxonomy for digital assets. This system of definitions will help market participants, software developers, and consumers engage with crypto systems and assets with confidence. The agency will take action to prevent fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in regulating prediction markets, which has been a contentious issue, particularly with regards to state gaming laws. The agency has sued several states to defend its exclusive jurisdiction over these firms. Recently, the CFTC joined a Department of Justice case against a US Army Special Forces soldier accused of placing prediction-market bets on military action in Venezuela. The agency is committed to taking action against bad actors in the markets and is serious about enforcement.