US Regulator CFTC to Utilize AI for Crypto Registration Reviews

The US Commodity Futures Trading Commission, known for its openness to digital assets, is now embracing artificial intelligence to compensate for a significant reduction in its workforce, according to Chairman Mike Selig. In an interview with CoinDesk, Selig, who is scheduled to appear at Consensus 2026 in Miami, stated that AI and automation will help offset personnel cuts resulting from President Donald Trump's efforts to reduce federal staffing. The agency, poised to become a leading US regulator for the crypto sector, is leveraging technology to review registration applications and aid in market surveillance. Currently, the CFTC's registration process relies on manual document submission, but Selig noted that they are developing systems to automate this process, making it more efficient. AI tools can review applications, flag issues for staff, and make their jobs easier by providing faster feedback and rejecting incomplete submissions. Selig mentioned that his staff is being trained to use Microsoft's Copilot and is also developing in-house tools for reviewing swap data and market surveillance. Since taking the helm of the US derivatives regulator four months ago, Selig has overseen the agency's foray into emerging technologies, including crypto and prediction markets oversight. 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. Selig believes this development will allow market participants to engage with crypto systems confidently, knowing they are not violating securities laws. The agency will police fraud, manipulation, and insider trading in crypto markets. However, the regulator's stance on prediction markets has been contentious, with Selig asserting the CFTC's exclusive jurisdiction over these firms, leading to conflicts with states that have challenged companies for violating state gaming laws. The CFTC has sued several states and recently joined a Department of Justice case against a US Army Special Forces soldier accused of placing prediction-market bets using confidential government information. Selig emphasized that the agency is committed to taking action against bad actors in the markets and will continue to monitor prediction markets closely.