US Crypto Regulatory Body to Utilize AI for Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now embracing artificial intelligence to compensate for a significant reduction in its workforce. Chairman Mike Selig, who will be speaking at Consensus 2026, stated that AI and automation will help offset the effects of 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 advancing the use of technology to review registration applications and support market surveillance. Currently, the CFTC's registration process relies heavily on manual document submission, but the agency is working on automating this process to increase efficiency. AI tools will be used to review applications, flag issues for staff, and streamline the feedback process. Selig noted that AI can identify incomplete or inaccurate applications, allowing for faster rejection or prioritization. The agency is also training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Since taking the helm four months ago, Selig has led the agency into the realm of emerging technologies, including crypto and prediction markets oversight. A key initiative has been the development of a crypto taxonomy, a system of definitions for digital assets, in collaboration with the Securities and Exchange Commission. This guidance aims to provide clarity for market participants, developers, and consumers, enabling them to engage with crypto systems confidently. The CFTC is also taking action against fraud, manipulation, and insider trading in crypto markets. Furthermore, the agency has been involved in the regulation of prediction markets, which has been a contentious issue, with Selig asserting the CFTC's exclusive jurisdiction over these firms. The agency has sued several states and is taking enforcement action against bad actors in the markets, demonstrating its commitment to regulating the crypto and prediction markets sectors.