CFTC Deploys AI for Crypto Reviews Amid Staff Cuts

The U.S. Commodity Futures Trading Commission is deploying artificial intelligence tools to review cryptocurrency registration applications and enhance market oversight, agency Chair Michael Selig said, as the regulator grapples with a workforce reduced by more than 20 percent since fiscal 2024.

Selig told reporters that the CFTC is building systems to automate the currently manual registration process. "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. The technology can identify blank spaces, inadequate descriptions or clear errors, rejecting incomplete filings or moving them to the end of the review queue. Staff are being trained on Microsoft 365 Copilot, and the agency is developing in-house tools to analyze swap data and detect potential fraud, market manipulation or insider trading in crypto and derivatives markets.

The push comes amid federal workforce reductions that have shrunk CFTC staffing from about 708 full-time employees at the end of fiscal 2024 to roughly 543. Selig described the...