CFTC to use AI to screen crypto registration filings

The Commodity Futures Trading Commission plans to use artificial intelligence to screen crypto registration applications, flag incomplete or incorrect filings and accelerate staff review as it adjusts to recent staffing reductions, CFTC Chair Michael Selig said.

Selig told reporters the agency expects AI to examine incoming filings, point out specific problems for reviewers and remove clearly deficient submissions from the front of the queue. “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.

Officials say the technology will look for blank fields, inadequate descriptions and plainly incorrect information, then either reject those filings or move them lower in priority so staff can focus on submissions that appear complete and substantively adequate.

The CFTC also intends to apply AI for market surveillance, Selig added. He linked the adoption of automation in part to pressure to reduce the size of the federal workforce and described efficiency gains as a way to sustain oversight while adjusting to fewer employees.

The agency's enforcement division has faced scrutiny after reports that retirements and staff reductions left the CFTC's Chicago office without enforcement attorneys. Lawmakers raised questions about the agency's capacity during a House Agriculture Committee hearing on April 16, asking whether the CFTC has sufficient personnel and resources to oversee crypto markets and prediction markets as Congress considers broader digital asset legislation.

Funding has been a recurring issue for the CFTC. The Securities and Exchange Commission employs roughly six times as many staff, and former agency leaders including Rostin Behnam and Brian Quintenz have publicly urged increased appropriations for the CFTC.

Selig said the agency is hiring and deploying technology to improve performance. “We are running more efficiently and effectively than ever before,” he said. The CFTC did not immediately answer questions about whether AI systems are being used within its enforcement division or about potential risks tied to deploying AI in regulatory and investigative work.

Agency officials described the AI screening as an initial triage tool: automated checks for missing information, basic inconsistencies and other clear defects so human reviewers can provide faster feedback to applicants and speed processing for filings that meet basic standards.

The CFTC's use of machine learning and automation for application processing and market surveillance follows broader federal interest in such tools for supervision. Congress continues to consider legislation that could change the CFTC's role in digital assets, a development industry participants and lawmakers say could affect the agency's responsibilities.