US Crypto Regulatory Agency Adopts 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 revealed in an interview that the agency is developing new technologies to streamline its operations, including the use of AI in reviewing registration applications and conducting market surveillance. Currently, the registration process involves manual document submission, but the CFTC is working on automating this process to improve efficiency. AI tools will be utilized to review applications, flag potential issues for staff, and provide faster feedback. The agency is also training its staff to use Microsoft's Copilot and is developing in-house tools for reviewing swap data and market surveillance. Under Selig's leadership, the CFTC has made significant strides in overseeing emerging technologies, including crypto and prediction markets. A key initiative has been the establishment of a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. The agency has also taken a firm stance on its jurisdiction over prediction markets, which has led to conflicts with states. The CFTC is committed to policing fraud and manipulation in crypto markets and will continue to take action against bad actors.