US Regulator to Leverage AI for Crypto Registration 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 discussed this initiative in an interview, highlighting the agency's push to utilize AI for reviewing registration applications and aiding in market surveillance. Currently, the registration process involves manual document submission, but the CFTC is working on automating this process to increase efficiency. AI tools will be used to review applications, flag issues for staff, and expedite the feedback and rejection process. Selig mentioned that his team is being trained to use Microsoft's Copilot and is also developing in-house tools for reviewing swap data and market surveillance. The agency has been proactive in overseeing emerging technologies, including crypto and prediction markets, under Selig's leadership. 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. The CFTC is committed to policing fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in contentious issues surrounding prediction markets, with Selig asserting the CFTC's exclusive jurisdiction over these firms. The agency has taken enforcement actions, including a recent case against a US Army soldier accused of insider trading in prediction markets. Selig emphasized the CFTC's serious stance on enforcing regulations in these markets.