US Crypto Regulator to Utilize AI for Application Reviews

The US Commodity Futures Trading Commission, known for its open approach to digital assets, is now embracing artificial intelligence to compensate for the loss of over a fifth of its workforce, as stated by Chairman Mike Selig in an interview. Selig, who is scheduled to appear at Consensus 2026, mentioned that AI and automation will help make up for the personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The agency aims to become a leading US regulator for the crypto sector and is working towards utilizing technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submissions, but the agency is developing 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 building in-house tools for reviewing swap data and market surveillance, and staff are being trained on using Microsoft's Copilot. 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. 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 with confidence, and the CFTC will take action to police fraud, manipulation, and insider trading in crypto markets. The agency has also been involved in contentious issues surrounding prediction markets, with Selig maintaining that the CFTC has exclusive jurisdiction over these firms. The agency has taken enforcement action against bad actors in the markets and will continue to monitor and take action as necessary.