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 a significant reduction in its workforce. Chairman Mike Selig revealed this in an interview, highlighting the agency's efforts to become a leading regulator in the crypto sector. The CFTC is working on implementing AI and automation to review registration applications, as well as assist in market surveillance, thereby enhancing the efficiency of its manual document submission process. Selig explained that AI tools can review applications, flag specific issues for staff, and provide faster feedback, while also rejecting incomplete or erroneous submissions. The agency is currently training staff to use Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Since taking the helm four months ago, Selig has prioritized oversight of 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 CFTC is committed to policing fraud, manipulation, and insider trading in crypto markets, and Selig has taken a firm stance on the agency's exclusive jurisdiction over prediction markets, defending it against state challenges. The agency has also taken enforcement action against bad actors in prediction markets, demonstrating its serious approach to regulation.