US Crypto Regulatory Body to Utilize AI for Application Review

As the US Commodity Futures Trading Commission continues to embrace digital assets, it is also turning to artificial intelligence to compensate for a reduced workforce. Chairman Mike Selig discussed this approach in an interview, noting that the agency is leveraging AI and automation to make up for personnel cuts. The CFTC is on track to become a leading regulator for the crypto sector in the US and is pushing to use technology for reviewing registration applications and aiding in market surveillance. Currently, the registration process relies on manual document submission, but the agency is working to automate this process for greater efficiency. AI tools can review applications, flag issues for staff, and make the feedback process faster. The agency is also utilizing Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Chairman Selig emphasized the importance of oversight in the crypto industry, highlighting the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets. This system provides clarity on regulatory jurisdictions for different subsets of crypto, allowing market participants and consumers to engage with crypto systems confidently. The CFTC is committed to policing fraud, manipulation, and insider trading in crypto markets. Additionally, the agency has been involved in regulating prediction markets, which has led to contention with states challenging companies for violating state gaming laws. The CFTC maintains its stance as the sole regulator of these firms and has taken action against bad actors, demonstrating its commitment to enforcing regulations in the crypto and prediction markets spaces.