US Crypto Regulatory Body Implements AI for Application Review

The US Commodity Futures Trading Commission, known for its proactive approach to digital assets, is now embracing artificial intelligence to compensate for its reduced workforce, according to Chairman Mike Selig. In an interview, Selig discussed the agency's plans to utilize AI and automation to streamline processes, particularly in reviewing registration applications and conducting market surveillance. Currently, the registration process involves manual document submission, but the agency is developing systems to automate this process, making it more efficient. AI tools will be used to review applications, flag issues for staff, and accelerate the feedback and rejection process. The agency is training staff on Microsoft's Copilot and building in-house tools for reviewing swap data and market surveillance. Under Selig's leadership, the agency has been actively involved in overseeing emerging technologies, including crypto and prediction markets. A significant 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 an individual accused of using confidential government information and fraud in prediction-market bets. Selig emphasized the agency's commitment to enforcing regulations and taking action against bad actors in the market.