US Crypto Regulatory Body to Utilize AI for Application Reviews

The US Commodity Futures Trading Commission, known for its embracing stance on digital assets, is further advancing its use of artificial intelligence to compensate for a significant reduction in its workforce. According to Chairman Mike Selig, in an interview with CoinDesk, the agency is leveraging AI and automation to make up for personnel cuts, a move aligned with President Donald Trump's efforts to reduce federal staffing. Selig, set to appear at Consensus 2026, emphasized the agency's push towards utilizing AI in reviewing registration applications and aiding in market surveillance, marking a significant step forward in its mission to become a leading regulator for the crypto sector in the US. Currently, the CFTC's registration process is manual, relying on the physical submission of documents. However, Selig outlined plans to automate this process, making it more efficient. AI tools are envisioned to review applications, flag issues for staff, and make the feedback process faster, including the ability to reject incomplete or erroneous submissions. The agency is training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance, underscoring its commitment to embracing technology. As the derivatives regulator's chairman for four months, Selig has been instrumental in the agency's foray into emerging technologies, including crypto and prediction markets oversight. A key initiative has been the joint guidance with the Securities and Exchange Commission on a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. This move is expected to give market participants, developers, and consumers confidence in engaging with crypto systems without inadvertently violating securities laws. Selig also highlighted the agency's stance on policing fraud, manipulation, and insider trading in crypto markets. Moreover, the CFTC's involvement in prediction markets has been contentious, with Selig asserting the agency's exclusive jurisdiction over these businesses, leading to legal challenges with states. The agency has demonstrated its commitment to enforcement, as seen in its participation in a Department of Justice case against a US Army soldier accused of insider trading in prediction markets. Selig reaffirmed the CFTC's serious stance on enforcing regulations in these markets, warning bad actors of impending action.