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 offset the impact of significant workforce reductions. Chairman Mike Selig, set to speak at Consensus 2026, stated that AI and automation will help compensate for personnel cuts implemented under President Donald Trump's initiative to reduce federal staffing. The agency, poised to become a leading US regulator for the crypto sector, is advancing the use of technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but Selig noted that they are 'building out systems to automate that, making it much more efficient.' AI tools can review applications, flag issues for staff, and make their jobs easier and faster, also enabling the rejection of incomplete or improper submissions. Selig mentioned that his staff is being trained on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. The chairman emphasized the agency's embrace of technology, particularly in overseeing emerging technologies like 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. This development is expected to allow market participants to engage with crypto systems confidently. The CFTC is also taking action against fraud and manipulation in crypto markets. Additionally, Selig's stance on prediction markets has been contentious, with the agency asserting its exclusive jurisdiction over these businesses. The CFTC has sued several states and is involved in a Department of Justice case against an individual accused of insider trading in prediction markets. Selig reaffirmed the agency's commitment to enforcing regulations and taking action against bad actors in the markets.