US Crypto Regulatory Body to Leverage AI for Application Reviews

The US Commodity Futures Trading Commission, known for its open stance on digital assets, is turning to artificial intelligence to compensate for a significant reduction in its workforce, according to Chairman Mike Selig. In an interview, Selig, who is scheduled to appear at Consensus 2026, mentioned that AI and automation are being utilized to make up for personnel cuts, a result of President Donald Trump's efforts to reduce federal staffing. The agency, poised to become a leading regulator in the US crypto sector, is exploring the use of technology to review registration applications and aid in market surveillance. Currently, the CFTC's registration process relies on manual document submissions, prompting the development of automated systems to increase efficiency. Selig explained that AI tools can review applications, flag issues for staff, and expedite the feedback process. The agency is also training staff on Microsoft's Copilot and building in-house tools for reviewing swap data and market surveillance. A key initiative under Selig's leadership has been the oversight of the crypto industry, including the development of a digital asset taxonomy in collaboration with the Securities and Exchange Commission. This system provides clarity on regulatory jurisdictions for different subsets of crypto, enabling market participants and consumers to engage with crypto systems with confidence. Furthermore, the CFTC is taking action against fraud, manipulation, and insider trading in crypto markets. Selig's stance on prediction markets has been contentious, with the agency asserting its exclusive jurisdiction over these businesses. The CFTC has sued several states challenging companies for violating state gaming laws and has joined a Department of Justice case against an individual accused of using confidential government information for prediction-market bets. Selig emphasized the agency's commitment to enforcing regulations and taking action against bad actors in the markets.