US Crypto Regulatory Body to Leverage AI for Application Review

The US Commodity Futures Trading Commission, known for its openness to 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 stated that the agency, which is poised to become a leading US regulator for the crypto sector, is working on utilizing AI to review registration applications and assist in market surveillance, thereby increasing efficiency. Currently, the 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 reject incomplete or incorrect submissions. The agency is also training staff to use Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Under Selig's leadership, the agency 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. The agency is also taking action against fraud, manipulation, and insider trading in crypto markets. Furthermore, Selig has been involved in a contentious issue regarding prediction markets, defending the agency's exclusive jurisdiction over these firms. The CFTC has joined a Department of Justice case against a US Army soldier accused of insider trading and has vowed to take action against bad actors in the markets.