US Regulator to Utilize AI for Crypto Registration Applications

The US Commodity Futures Trading Commission, known for its embrace of digital assets, is now turning to artificial intelligence to compensate for a significant reduction in its workforce. According to Chairman Mike Selig, the agency is exploring the use of AI and automation to review registration applications, as well as to aid in market surveillance, following staff cuts implemented under President Donald Trump's initiative to reduce federal staffing. Selig, who is set to appear at Consensus 2026, noted that the current registration process is manual and relies on the submission of documents, but the agency is working to automate this process to make it more efficient. AI tools can be utilized to review applications, flag certain issues for staff, and make the feedback process faster. The agency is also training staff on Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Under Selig's leadership, the agency has taken a proactive approach to emerging technologies, including oversight of 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 committed to policing fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in the regulation of prediction markets, which has been a contentious issue, with the agency defending its exclusive jurisdiction against state challenges. The CFTC has also taken enforcement action against bad actors in prediction markets, demonstrating its commitment to monitoring and regulating these markets.