US Crypto Regulatory Body to Leverage 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 working on utilizing AI and automation to review registration applications and assist in market surveillance, making the process more efficient. The current manual submission of documents is being transformed into an automated system, with AI tools capable of reviewing applications, flagging issues, and streamlining the feedback process. Selig's team is being trained on Microsoft's Copilot, and the agency is also developing in-house tools for reviewing swap data and market surveillance. A key initiative under Selig's leadership has been the oversight of the crypto industry, including the creation of a 'taxonomy' for digital assets in collaboration with the Securities and Exchange Commission. This system of definitions aims to provide clarity on regulatory jurisdictions for different subsets of crypto. The agency is also taking action against fraudulent activities in crypto markets and has been involved in contentious cases regarding prediction markets, defending its exclusive jurisdiction over these firms.