US Regulator to Utilize AI for Crypto Registration Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now turning to artificial intelligence to compensate for a significant reduction in its workforce, as stated by Chairman Mike Selig in an interview. Selig, who is scheduled to appear at Consensus 2026, emphasized the potential of AI and automation in making up for personnel cuts, particularly in the context of President Donald Trump's initiative to decrease federal staffing. The agency, which is poised to become a leading regulator for the crypto sector in the US, is pushing to leverage technology for reviewing registration applications and aiding in market surveillance. Currently, the CFTC's registration process is manual, relying on the submission of documents, but Selig noted that they are building systems to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and make the feedback process faster. They can also identify and reject incomplete or incorrect applications. Selig mentioned that his staff is being trained to use Microsoft's Copilot and is 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 been proactive in overseeing emerging technologies, including 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. This move is expected to give market participants, developers, and consumers confidence in engaging with crypto systems without inadvertently violating securities laws. Selig also discussed the agency's stance on prediction markets, emphasizing the CFTC's exclusive jurisdiction and its commitment to policing fraud and manipulation in crypto markets. The agency has been involved in several cases, including a recent lawsuit against a US Army Special Forces soldier accused of insider trading in prediction markets. Selig reiterated the CFTC's serious approach to enforcing regulations and taking action against bad actors in the markets.