US Regulator to Utilize AI for Crypto Application Reviews

The US Commodity Futures Trading Commission, known for its embrace of 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 is leveraging AI and automation to make up for personnel cuts, as part of President Donald Trump's initiative to decrease federal staffing. Selig, who is scheduled to appear at Consensus 2026, stated that the CFTC is working towards utilizing AI to review registration applications and assist in market surveillance, making the agency a leading US regulator for the crypto sector. The current registration process relies on manual document submission, but the CFTC is building systems to automate this process, making it more efficient. AI tools can review applications, flag certain issues for staff, and reject incomplete or incorrect submissions. The agency is also developing in-house tools for reviewing swap data and market surveillance, with staff being trained on Microsoft's Copilot. Selig emphasized the importance of oversight in the crypto industry, citing the joint guidance with the Securities and Exchange Commission to establish a taxonomy for digital assets. This system of definitions will help market participants and consumers engage with crypto systems confidently, without violating securities laws. The CFTC is taking action to police fraud, manipulation, and insider trading in crypto markets, and Selig believes this will have a significant impact. Additionally, the agency is involved in regulating prediction markets, which has been a contentious issue, with the CFTC asserting its exclusive jurisdiction over these firms. The agency has sued several states and is taking enforcement action against bad actors in the market, demonstrating its commitment to regulating the crypto sector.