US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its embracing stance on digital assets, is now leveraging 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 can offset the effects of personnel cuts under the current administration's efforts to reduce federal staffing. The agency, which is poised to become a leading US regulator for the crypto sector, is working towards utilizing technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but the agency is developing systems to automate this process, making it more efficient. AI tools can review applications, flag certain issues for staff, and make their jobs easier by providing faster feedback and rejecting incomplete applications. The chairman mentioned that his staff is being trained on using Microsoft's Copilot, and the agency is also building in-house tools for reviewing swap data and market surveillance. Since taking the helm of the US derivatives regulator four months ago, Selig has led the agency into the forefront of emerging technologies, including crypto and prediction markets oversight. One of his major initiatives has been to establish oversight of the crypto industry, including a joint guidance with the Securities and Exchange Commission to create a taxonomy for digital assets. This system of definitions will help market participants, software developers, and consumers engage with crypto systems and assets with confidence. The agency will also take action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in regulating prediction markets, which has been a contentious issue, with the agency suing several states over their challenges to companies operating in this space. The CFTC has also joined a Department of Justice case against a US Army Special Forces soldier accused of insider trading in prediction markets. Selig emphasized that the agency is committed to taking action against bad actors in the markets and will continue to monitor and enforce regulations in the crypto and prediction markets spaces.