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, as stated by Chairman Mike Selig in an interview. Selig, who is set to appear at Consensus 2026, mentioned that AI and automation will help make up for the personnel cuts resulting from President Donald Trump's campaign to reduce federal staffing. The agency, which is becoming a leading US regulator for the crypto sector, is working towards utilizing technology to review registration applications and aid in market surveillance. Currently, the CFTC's registration process relies on manual document submission, so the agency is building systems to automate this process, making it more efficient. AI tools can review applications, flag certain issues for staff, and make their jobs easier and faster, while also rejecting incomplete or incorrect submissions. Selig's staff is being trained on Microsoft's Copilot, and the agency is also developing in-house tools for reviewing swap data and market surveillance. The chairman has been at the helm of the US derivatives regulator for four months and has taken significant steps in overseeing 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. This development will allow market participants to engage with crypto systems and assets with confidence, and the CFTC will take action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in contentious issues surrounding prediction markets, with Selig maintaining that the CFTC has exclusive jurisdiction over these firms. The agency has sued several states and joined a Department of Justice case against a US Army soldier accused of insider trading. Selig emphasized that the CFTC is serious about taking action against bad actors in the markets and will continue to monitor and enforce regulations.