Already known for its embrace of digital assets, the U.S. Commodity Futures Trading Commission is also relying on artificial intelligence to take over after cutting more than a fifth of its workforce, its chairman Mike Selig said in an interview with CoinDesk.
Selig, who is scheduled to appear at Consensus 2026 in Miami next week, said AI and automation can offset staffing reductions amid President Donald Trump’s push to reduce the federal workforce. He said the agency — poised to become one of the top U.S. regulators of the crypto industry — is working to use technology to review registration applications and even assist with market surveillance.
The CFTC registration process currently relies on manual submission of documents, Selig said, so “we’re building systems to automate that, to make it much more efficient.” “AI tools can be used to review applications, flag certain things to staff, make their jobs easier, allow them to provide feedback much more quickly and also reject certain things that are not materially complete,” he said. “We may see something come in with blank space or inadequate descriptions or things that are clearly wrong, picked up by the AI, and it may reject them or put them at the back of the queue.”
Selig said his staff is currently being trained to use Microsoft’s Copilot for the first time, but the agency is also building “in-house” tools to “look at swap data, review it for market surveillance purposes;
The president has been at the helm of the US derivatives regulator for four months and has waded into the fray on emerging technologies, including monitoring both the crypto and 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 oversight of the sector. To that end, he said the most significant action taken to date was the joint directive alongside the Securities and Exchange Commission to establish a “taxonomy” for digital assets – a system of definitions for how each subset of crypto will fit across the spectrum of regulatory jurisdictions.
“This is a massive development that will allow market participants, software developers and consumers to interact with crypto systems and assets with confidence that they will not trip over securities laws,” he said, although the interpretive guidance is not yet fully implemented in terms of permanent policy. “Now we have clarity,” he said. “We understand what our responsibility is at the CFTC, and we will take action to combat fraud, manipulation, and insider trading in the crypto markets, and we believe this will have a huge impact, in addition to providing clarity for consumers and users of the asset class.”
Prediction Markets
But its foray into prediction markets, involving companies such as Kalshi, Polymarket, Crypto.com, Coinbase and Gemini, was immediately the most controversial. Selig’s unyielding position that the CFTC is the sole competent regulator of these companies has put him at odds with states that have challenged the companies for violating state gambling laws — particularly in the area of sports betting. He has sued several states, including recently New York, defending the agency’s “exclusive jurisdiction.”
Late last week, the CFTC joined a Justice Department case against a U.S. Army Special Forces soldier accused of placing prediction bets on military action in Venezuela in which he participated. Gannon Ken Van Dyke, a master sergeant among the Army’s vaunted Green Berets, has been arrested and charged with use of confidential government information and fraud, as well as the CFTC’s own complaint against him for insider trading.
“We are on the case and continuing to monitor the news,” Selig said of his agency’s strict stance on forecast markets. “We will take action against bad actors in our markets, and we take this very seriously. This is not lip service, and market participants should know about it.”
Read more: US CFTC’s Selig says AI has helped offset staff cuts at the top crypto watchdog.
