CFTC Chair to Utilize AI for Reviewing U.S. Crypto Registration Applications

On April 28, Mike Selig, the chairman of the U.S. Commodity Futures Trading Commission (CFTC), stated that after reducing its workforce by more than 20%, the CFTC is relying on artificial intelligence (AI) to compensate for the staff shortage. He mentioned that AI and automation could help fill the gap in personnel amid the federal workforce cuts initiated during President Trump’s administration. He noted that the agency, which is becoming a leading regulator in the U.S. crypto space, is pushing to use relevant technologies to review registration applications and even assist in market monitoring. Selig indicated that the CFTC’s registration process still relies on manually submitted documents, stating, “We are building systems to automate this, making it much more efficient.” He added, “AI tools can be used to review applications, flag certain issues for staff, make their work easier, speed up their feedback, and reject applications that are clearly not substantively completed. We can see gaps, insufficient descriptions, or obvious errors in the submissions identified by AI, which can reject these applications or place them at the end of the queue.” Selig has been at the helm of the U.S. derivatives regulatory agency for four months, during which the agency has begun regulating emerging technologies, including crypto and prediction markets. However, Selig’s regulatory approach to prediction markets, involving companies like Kalshi, Polymarket, Crypto.com, Coinbase, and Gemini, has sparked controversy. Selig maintains that the CFTC is the only relevant regulator for these companies, putting it at odds with state governments challenging these companies for allegedly violating state gambling laws, particularly in the sports betting sector. He has sued several states, most recently New York, to defend the agency’s “exclusive jurisdiction.”