US Crypto Regulatory Body to Utilize AI for Application Review

The US Commodity Futures Trading Commission, known for its embracing stance on digital assets, is further incorporating artificial intelligence to compensate for its reduced workforce, as stated by Chairman Mike Selig in an interview. Selig, who is set to appear at Consensus 2026, mentioned that AI and automation will help offset personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The agency, which is on its way to becoming a leading US regulator for the crypto sector, aims to utilize technology for reviewing registration applications and assisting in market surveillance. Currently, the CFTC's registration process involves manual document submission, but the agency is developing systems to automate this process, making it more efficient. AI tools will be used to review applications, flag issues for staff, and make their jobs easier by providing faster feedback and rejecting incomplete submissions. Selig's staff is being trained on Microsoft's Copilot, and the agency is also developing in-house tools for reviewing swap data and market surveillance. The chairman has been leading the US derivatives regulator for four months and has taken significant steps in overseeing emerging technologies, including crypto and prediction markets. One major initiative has been the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets, providing clarity on regulatory jurisdictions. Selig believes this development will allow market participants to engage with crypto systems confidently. The agency will take action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in regulating prediction markets, which has been a contentious issue, particularly with states challenging companies for violating state gaming laws. The agency has sued several states, defending its exclusive jurisdiction. Recently, the CFTC joined a Department of Justice case against a US Army Special Forces soldier accused of insider trading in prediction markets. Selig emphasized that the agency is serious about taking action against bad actors in the markets and will continue to monitor and enforce regulations.