US Crypto Regulatory Body to Leverage AI for Application Reviews

The US Commodity Futures Trading Commission, known for its acceptance 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 working on implementing AI and automation to make up for staff cuts. The CFTC is set to become a leading regulator in the US crypto sector and is exploring the use of technology to review registration applications and aid in market surveillance. Currently, the registration process relies on manual document submission, but the agency is 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. The agency is also training staff to use Microsoft's Copilot and developing in-house tools for reviewing swap data and market surveillance. Chairman Selig has been at the helm of the US derivatives regulator for four months and has made significant strides 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. The agency is also taking action to police fraud, manipulation, and insider trading in crypto markets. Additionally, the CFTC has been involved in a contentious issue with prediction markets, with Chairman Selig maintaining that the agency has exclusive jurisdiction over these firms. The CFTC has sued several states and is taking enforcement action against bad actors in the markets, demonstrating its commitment to regulating the industry.