US Crypto Regulatory Body to Utilize AI for Application Review

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. Chairman Mike Selig stated in an interview that the agency aims to leverage AI and automation to make up for personnel cuts. The CFTC is working on implementing AI to review registration applications and assist in market surveillance, which currently relies on manual document submission. The agency is building systems to automate this process, making it more efficient. AI tools will be used to review applications, flag issues for staff, and provide faster feedback. The CFTC is also developing in-house tools for reviewing swap data and market surveillance, and staff are being trained on using Microsoft's Copilot. Chairman Selig has been at the helm of the US derivatives regulator for four months and has taken initiatives to oversee emerging technologies, including crypto and prediction markets. The agency has issued joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets, providing clarity on regulatory jurisdictions. The CFTC is also taking action to police fraud and manipulation in crypto markets. Additionally, the agency has been involved in a contentious issue with prediction markets, with Chairman 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.