US Crypto Regulatory Body to Utilize AI for Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now turning to artificial intelligence to compensate for the reduction in its workforce, according to Chairman Mike Selig. In an interview with CoinDesk, Selig mentioned that the agency, which is on its way to becoming a leading regulator for the crypto sector in the US, is pushing to use AI and automation to review registration applications and aid in market surveillance. Currently, the registration process involves manual document submission, but the agency is working on automating this process to make it more efficient. AI tools can review applications, flag issues for staff, and make the feedback process faster. They can also reject incomplete applications or those with inaccurate information. The CFTC is training its staff to use Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Chairman Selig has been leading the US derivatives regulator for four months and has been proactive in overseeing emerging technologies, including crypto and prediction markets. One of his key initiatives has been to establish a 'taxonomy' for digital assets, providing clarity on regulatory jurisdictions. The agency has also been involved in policing fraud and manipulation in crypto markets. Additionally, the CFTC has been dealing with prediction markets, which has led to conflicts with states over regulatory jurisdiction. The agency has taken a firm stance, suing states that have challenged companies like Kalshi and Polymarket for violating state gaming laws. The CFTC has also joined a Department of Justice case against a US Army soldier accused of insider trading in prediction markets. Chairman Selig emphasized that the agency is committed to taking action against bad actors in the markets and is serious about its enforcement stance.