CFTC's AI will review U.S. crypto registration applications, chairman tells CoinDesk

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CFTC's AI will review U.S. crypto registration applications, chairman tells CoinDesk The regulator is working on new technology to stretch abilities of reduced staff, says Chairman Mike Selig, including AI monitoring of trading data. What to know: - The CFTC is building tools to use artificial intelligence to review registration applications and monitor trading, Chairman Mike Selig told CoinDesk. - He also said he thinks his crypto taxonomy guidance shared with the Securities and Exchange Commission is the biggest-ticket crypto item he's pursued so far. - In prediction markets, participants should be "on notice" about the CFTC's aggressive enforcement stance, he said. Already noted for embracing digital assets, the U.S. Commodity Futures Trading Commission is also leaning into artificial intelligence to pick up the slack after slashing more than a fifth of its workforce, Chairman Mike Selig said in an interview with CoinDesk. Selig, who is set to appear at Consensus 2026 in Miami next week, said AI and automation can make up for the personnel cuts under President Donald Trump's campaign to reduce federal staffing. He said the agency — on its way to become a leading U.S. regulator for the crypto sector — is pushing toward using the technology to review registration applications and even help in market surveillance. The CFTC registration process currently relies on the manual submission of documents, Selig said, so "we're building out systems to automate that, to make it much more efficient." "AI tools can be used to review the applications, flag certain things for the staff, make their jobs easier, make it much faster for them to provide feedback and also reject certain things that aren't materially complete," he said. "We can see something come in with blank space or inadequate descriptions or things that are clearly wrong, picked up by AI, and it can reject those or put them at the back of the line." Selig said his staff is currently being trained on using Microsoft's Copilot for the first time, but the agency is also building some "in-house" tools for "reviewing swap data, reviewing for market-surveillance purposes; We have tools now that can help us reach conclusions about certain trades and all of that. So we're embracing technology." The chairman has been at the helm of the U.S. derivatives regulator for four months, and it has leapt into the fray on emerging technologies, including the oversight of both crypto and the prediction markets. Crypto taxonomy Even in the absence — so far — of a new crypto law from Congress, one of Selig's major initiatives has been embracing oversight of the industry. To that end, he said the most important action taken to-date was the joint guidance alongside the Securities and Exchange Commission to set out a "taxonomy" for digital assets — a system of definitions for how each subset of crypto will fit into the range of regulatory jurisdictions. "That is a massive development that is going to allow market participants, software developers and consumers to engage with crypto systems and crypto assets with confidence that they're not tripping into the securities laws," he said, though the interpretive guidance doesn't yet carry to full force of permanent policy. "Now we have clarity," he said. "We understand what our responsibility is at the CFTC, and we will be taking action to police fraud, manipulation, insider trading in crypto markets, and we think that's going to have a huge impact, in addition to the clarity for consumers and users of the asset class." Prediction markets But his prediction-markets foray, involving the businesses such as Kalshi, Polymarket, Crypto.com, Coinbase and Gemini, has been the most immediately contentious. Selig's unbending stance that the CFTC is the only relevant regulator of these firms has put him at odds with the states who have challenged the companies for running afoul of state gaming laws — especially in the sports betting realm. He's sued several states, most recently including New York, defending the agency's "exclusive jurisdiction." Late last week, the CFTC joined in a Department of Justice case against a U.S. Army Special Forces soldier who is accused of placing prediction-market bets on the military action in Venezuela that he took part in. Gannon Ken Van Dyke, a master sergeant among the Army's vaunted green berets, was arrested and charged with using confidential government information and fraud, plus the CFTC's own complaint against him for insider trading. "We are on the case and continue to watch for news," Selig said of his agency's enforcement stance on prediction markets. "We will be taking action against bad actors in our markets, and we're taking this very seriously. It's not lip service, and market participants should be on notice." Read More: U.S. CFTC's Selig says AI has helped make up for staffing cuts at key crypto watchdog More For You BILS was developed in collaboration with the Solana network and crypto custodian heavyweights Fireblocks with auditing oversight provided by Big Four consultancy firm EY. What to know: - Israel granted approval for the first stablecoin pegged to the shekel. - Bits of Gold was authorized to issue the BILS token under a rulebook set out by the Capital Market Authority. - The shekel is one of the world's best-performing currencies against the dollar this year.

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