US Regulator to Leverage AI for Crypto Application Reviews

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, according to Chairman Mike Selig in an interview. Selig, who is scheduled to speak at Consensus 2026, mentioned that AI and automation can offset personnel cuts, part of President Donald Trump's effort to reduce federal staff. The agency, poised to become a leading US regulator for the crypto sector, is moving towards utilizing technology for reviewing registration applications and aiding in market surveillance. Currently, the CFTC's registration process involves manual document submission, which Selig aims to automate for greater efficiency. AI tools can review applications, flag issues for staff, and accelerate the feedback process. The agency is also training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Under Selig's leadership, the derivatives regulator has made significant strides in overseeing emerging technologies, including crypto and prediction markets. A key initiative has been the joint guidance with the Securities and Exchange Commission to establish a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. Selig emphasized the importance of this development for market participants and consumers, enabling them to engage with crypto systems confidently. The CFTC is committed to policing fraud, manipulation, and insider trading in crypto markets. However, its stance on prediction markets has been contentious, particularly with regards to its exclusive jurisdiction over companies like Kalshi and Polymarket. The agency has sued several states challenging its authority and recently joined a Department of Justice case against a US Army soldier accused of insider trading in prediction markets. Selig reaffirmed the CFTC's commitment to enforcing regulations and taking action against bad actors in the markets.