The U.S. Commodity Futures Trading Commission, already notable for embracing digital assets, is also leaning toward artificial intelligence to pick up the slack after cutting more than a fifth of its workforce, Chairman Mike Selig said in an interview with CoinDesk.
Selig, who will appear at Consensus 2026 in Miami next week, said AI and automation can offset staff cuts under President Donald Trump’s campaign to reduce federal staff. He said the agency, on its way to becoming a leading US regulator for the crypto sector, is pushing the use of technology to review registration applications and even assist in market surveillance.
The CFTC’s registration process currently relies on manual filing of documents, Selig said, so “we’re developing systems to automate it, to make it much more efficient.” “AI tools can be used to review requests, flag certain things for staff, make their job easier, make it much quicker for them to provide feedback and also reject certain things that are not materially complete,” he said. “We can see that something comes in with blanks or inadequate descriptions or things that are clearly wrong, picked up by the AI, and it can reject them or put them at the back of the queue.”
Selig said his staff is currently receiving training on using Microsoft’s Copilot for the first time, but that the agency is also building some “in-house” tools to “review trading data, review for market surveillance purposes; now we have tools that can help us come to conclusions about certain trades and all that. So we’re embracing the technology.”
The president has been at the helm of the US derivatives regulator for four months and has come to the fore on emerging technologies, including oversight of cryptocurrency and prediction markets.
Crypto taxonomy
Even in the absence, so far, of a new cryptocurrency law from Congress, one of Selig’s main initiatives has been to embrace oversight of the industry. To that end, he said the most significant action taken to date was joint guidance with the Securities and Exchange Commission to establish a “taxonomy” for digital assets — a system of definitions for how each subset of cryptocurrencies will fit into the range of regulatory jurisdictions.
“That is a massive advance that will allow market participants, software developers and consumers to interact with cryptographic systems and crypto assets with confidence that they are not violating securities laws,” he said, although the interpretive guidance is not yet in full force as permanent policy. “Now we have clarity,” he said. “We understand what our responsibility is at the CFTC and we will take action to control fraud, manipulation and insider trading in the crypto markets, and we believe that will have a big impact, as well as clarity for consumers and users of the asset class.”
Prediction markets
But its foray into prediction markets, involving companies like Kalshi, Polymarket, Crypto.com, Coinbase and Gemini, has been the most immediately controversial. Selig’s adamant stance that the CFTC is the only relevant regulator of these companies has put him at odds with states that have challenged the companies for violating state gambling laws, especially in the sports betting space. He has sued several states, including 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 bets on the prediction market about military action in Venezuela in which he participated. 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, in addition to the CFTC’s own insider trading complaint against him.
“We are on the case and continue to monitor the news,” Selig said of his agency’s enforcement stance on prediction markets. “We will take action against bad actors in our markets, and we are taking it very seriously. This is not idle talk, and market participants should be alert.”
Read more: US CFTC’s Selig says AI has helped offset staff cuts at major cryptocurrency watchdog
