US Crypto Regulatory Body to Utilize AI for Application Review

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 this in an interview, stating that the agency is leveraging AI and automation to make up for personnel cuts. The CFTC is working to become a leading regulator in the US crypto sector and is exploring the use of technology to review registration applications and assist in market surveillance. Currently, the registration process relies on manual document submission, but the agency is building systems to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and make their jobs easier and faster. The agency is also training staff to use Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Chairman Selig has been at the helm of the US derivatives regulator for four months and has initiated efforts to oversee emerging technologies, including crypto and prediction markets. One major initiative has been the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets, providing clarity on regulatory jurisdictions. The agency is also taking action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in contentious issues surrounding prediction markets, with Chairman Selig taking an unbending stance that the CFTC is the sole relevant regulator. The agency has sued several states and is taking enforcement action against bad actors in the markets, demonstrating its commitment to regulating the crypto sector.