CFTC Chairman Says AI Will Review Crypto Registration Applications After Agency Loses One-Fifth of Staff

Key Takeaways CFTC Chairman Brian Selig confirmed the agency is deploying AI to review crypto registration applications and assist in market monitoring following staff reductions of more than 20%AI tools will flag incomplete submissions, identify errors, reject clearly deficient applications, and accelerate feedback -- replacing functions previously handled manuallyThe CFTC is positioning itself as the leading US crypto regulator, with Selig asserting exclusive CFTC jurisdiction over prediction market platforms including Kalshi, Polymarket, Crypto.com, Coinbase, and GeminiThe agency has sued multiple states, most recently New York, to defend its exclusive jurisdiction over prediction markets against state gambling law challengesSelig has been CFTC chairman for four months, during which the agency has expanded into crypto and prediction market regulation The US Commodity Futures Trading Commission is turning to artificial intelligence to plug a significant staffing gap after losing more than one-fifth of its workforce, with Chairman Brian Selig announcing on April 28 that AI will be deployed to review crypto registration applications and support market surveillance functions. Speaking publicly, Selig acknowledged that the agency's current registration process relies on manual document submissions -- a system he described as ripe for automation. "We are building systems to automate it and make it much more efficient," he said, adding that AI tools will be used to "review applications, flag certain things for staff, make their work easier, get them to provide feedback much faster, and reject applications that are clearly not substantially complete." Selig outlined specific AI capabilities the agency is developing, including the ability to identify gaps in submissions, flag inadequate descriptions, spot obvious errors, and either reject non-compliant applications outright or deprioritize them in the review queue. "We can see that there are gaps in the submissions, inadequate descriptions, or obvious errors that are identified by AI, and AI can reject these applications or put them at the end of the queue," he said. Staffing Cuts Drive the Push The AI initiative is a direct response to workforce reductions carried out under President Trump's federal personnel reduction program, which left the CFTC operating with significantly fewer staff. Rather than seeking to replace headcount through conventional hiring, Selig has framed AI and automation as a structural solution to the manpower gap -- a position that reflects both budget constraints and the administration's broader push to reduce the size of federal agencies. CFTC Emerges as Lead Crypto Regulator The staffing and technology developments come as the CFTC positions itself as the primary regulatory authority for crypto markets in the US -- a role that has grown in significance as the regulatory landscape for digital assets continues to evolve under the Trump administration. Selig has been at the helm for four months, a period during which the agency has expanded its regulatory footprint into both crypto markets and prediction platforms. Prediction Market Jurisdiction Sparks State Battles Selig's most controversial regulatory move has been asserting exclusive CFTC jurisdiction over prediction market platforms including Kalshi, Polymarket, Crypto.com, Coinbase, and Gemini. The stance has put the federal agency in direct conflict with state governments that argue these platforms violate state gambling laws, particularly in the context of sports betting markets. The CFTC has responded aggressively, suing multiple states to defend what Selig describes as the agency's exclusive jurisdiction. The most recent lawsuit targets New York. The jurisdictional battle sets up a significant legal confrontation between federal crypto regulatory authority and state-level gambling oversight -- a conflict with broad implications for how prediction markets and crypto derivatives platforms are regulated across the US.