US Regulator to Utilize AI for Crypto Application Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is turning to artificial intelligence to compensate for a significant reduction in its workforce. Chairman Mike Selig revealed in an interview that the agency, poised to become a leading regulator in the crypto sector, is leveraging AI and automation to review registration applications and aid in market surveillance. The current manual registration process is being overhauled to incorporate automated systems, making it more efficient. AI tools will be used to review applications, identify potential issues, and streamline the feedback process. The agency is also developing in-house tools for reviewing swap data and conducting market surveillance, with staff currently being trained on Microsoft's Copilot. A key initiative under Selig's leadership has been the oversight of the crypto industry, including the establishment of a digital asset taxonomy in conjunction with the Securities and Exchange Commission. This framework provides clarity on regulatory jurisdictions for different subsets of crypto assets, enabling market participants and consumers to engage with confidence. The CFTC is committed to policing fraud, manipulation, and insider trading in crypto markets, and is taking a strong stance on its exclusive jurisdiction over prediction markets, having sued several states and taken action against bad actors.