US CFTC uses AI to review crypto registrations! Chair Mike Selig: Fills layoff gaps, efficiency becomes super high

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Unfazed by a 20% staff cut, the CFTC is deploying AI to take charge! CFTC Chairman Mike Selig revealed that to fill the gaps left by the Trump administration's federal workforce reductions, the CFTC is actively implementing AI tools to review registration applications from crypto companies and monitor market trading. At the same time, Selig emphasized that the "Crypto Taxonomy" established with the SEC has brought clarity to the industry; he also boldly declared that the CFTC holds "exclusive jurisdiction" over prediction markets, having just teamed up with the DOJ to sue a U.S. Army Green Beret suspected of insider trading in prediction markets. (Previous coverage: CFTC loses 1/4 of its staff! Chairman Mike Selig tells Congress "AI will handle it," gets pushback from Democratic lawmakers) (Background: CFTC Chairman Selig takes a hard line: Prediction markets are "ours to regulate," jurisdiction is federal, lawsuits filed against three states) Facing the Trump administration's sweeping layoffs, the CFTC, which is gradually becoming the core U.S. crypto regulator, has decided to entrust major responsibilities to AI. CFTC Chairman Mike Selig, who will soon attend the Consensus 2026 conference in Miami, revealed in a recent interview with CoinDesk that the CFTC has lost more than one-fifth of its workforce under President Donald Trump's policy of reducing federal staffing. To bridge the human resource gap, the agency is embracing AI and automation technology. Selig explained that while the CFTC's registration process previously relied heavily on manual review of submitted documents, they are now building automated systems to significantly improve efficiency: "AI tools can be used to review registration applications and flag specific issues for regulators, which not only makes their jobs easier but also allows for faster feedback to applicants." "AI can easily identify applications that are left blank, inadequately described, or contain obvious errors, and either reject them outright or move them to the back of the queue." In addition to training staff on Microsoft Copilot, the CFTC is even developing "in-house" AI tools. These tools will be used to review Swap data and monitor markets, helping regulators reach conclusions on specific anomalous trades more quickly. Shortly after taking office, Selig is also actively intervening in the regulation of emerging technologies. He pointed out that although the U.S. Congress has yet to pass comprehensive crypto legislation, the most important step for the CFTC is the "Digital Asset Taxonomy" guidelines recently issued jointly with the SEC. This classification system clearly defines which regulatory jurisdiction each type of crypto asset falls under. Selig emphasized that this is a "massive development," allowing market participants and developers to participate in the crypto ecosystem with peace of mind, without the fear of inadvertently violating securities laws. He boldly declared: "Now that we have clarity, the CFTC will take action to crack down on fraud, manipulation, and insider trading in the crypto market." Regarding the "prediction markets" (such as Kalshi, Polymarket, and Coinbase) that have recently sparked nationwide controversy, Selig showed a tough, defensive stance. Faced with state governments banning these platforms on the grounds of violating local gambling laws, Selig insisted that the CFTC is the "only relevant regulator" for these companies, even going so far as to sue multiple state governments, including New York, vowing to defend federal "exclusive jurisdiction." However, the CFTC is equally relentless against bad actors in the market. Just last week, the CFTC, in conjunction with the DOJ, filed a lawsuit against Gannon Ken Van Dyke, a Sergeant Major in the U.S. Army Special Forces (Green Berets). The soldier is suspected of using classified information from his military operations in Venezuela to engage in illegal "insider trading" and fraud on prediction markets. Selig warned: "We are closely following the cases; we are not just talking." "We will take severe action against bad actors in the market, and market participants had better be on high alert."

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