US Regulator CFTC to Utilize AI for Crypto Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now embracing artificial intelligence to compensate for a significant reduction in its workforce, according to Chairman Mike Selig. In an interview with CoinDesk, Selig, who is scheduled to appear at Consensus 2026 in Miami, mentioned that AI and automation can offset the effects of personnel cuts under President Donald Trump's initiative to reduce federal staffing. The agency, poised to become a leading US regulator for the crypto sector, is advancing the use of technology to review registration applications and assist in market surveillance. Currently, the CFTC's registration process relies on manual document submission, which Selig aims to automate for greater efficiency. AI tools can review applications, flag issues for staff, and expedite the feedback process. They can also identify and reject incomplete or erroneous submissions. Selig's team is being trained on Microsoft's Copilot, and the agency is developing in-house tools for reviewing swap data and market surveillance. Since taking the helm of the US derivatives regulator four months ago, Selig has propelled the agency into the forefront of emerging technologies, including crypto and prediction markets oversight. A key initiative has been the joint guidance with the Securities and Exchange Commission to establish a 'taxonomy' for digital assets, providing a system of definitions for regulatory jurisdictions. This development is expected to enable market participants, developers, and consumers to engage with crypto systems confidently. The agency will police fraud, manipulation, and insider trading in crypto markets. However, Selig's stance on prediction markets has been contentious, particularly with regards to companies like Kalshi, Polymarket, Crypto.com, Coinbase, and Gemini. The CFTC has sued several states, defending its exclusive jurisdiction over these firms. Recently, the agency joined a Department of Justice case against a US Army Special Forces soldier accused of placing prediction-market bets using confidential government information. Selig emphasized the agency's commitment to enforcing regulations and taking action against bad actors in the markets.