US Crypto Regulatory Body to Leverage AI for Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now turning to artificial intelligence to compensate for a significant reduction in its workforce. Chairman Mike Selig discussed this development in an interview, highlighting the agency's efforts to become a leading regulator in the US crypto sector. The CFTC is working on automating its registration process, which currently relies on manual document submissions, to make it more efficient. AI tools will be used to review applications, identify potential issues, and provide feedback to applicants. The agency is also developing in-house tools for reviewing swap data and conducting market surveillance. Selig emphasized the importance of embracing technology, citing the use of Microsoft's Copilot and other tools to enhance the agency's capabilities. One of the major initiatives under Selig's leadership has been the oversight of the crypto industry, including the development of a 'taxonomy' for digital assets in conjunction with the Securities and Exchange Commission. This framework provides clarity on how different subsets of crypto assets fit into various regulatory jurisdictions. The CFTC is also taking action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in regulating prediction markets, which has been a contentious issue, with Selig maintaining that the CFTC has exclusive jurisdiction over these markets. The agency has taken enforcement action against bad actors in the prediction markets and will continue to monitor these markets closely.