CFTC Commissioner Selig Says AI Will Speed Fully Autonomous Trading, Calls for Regulatory Overhaul

Mike Selig, a commissioner at the US Commodity Futures Trading Commission, said AI could hasten the arrival of fully autonomous trading, with systems handling everything from identifying opportunities to executing trades. He said regulators should examine whether developers need to register, who bears liability when systems fail and how to verify trading entities.

CoinDesk reported on October 28 that Selig told an AI forum that the convergence of superintelligence, cryptocurrencies and modern financial infrastructure could fundamentally reshape markets. He said it would expand access to sophisticated financial tools, sharpen corporate risk management and create new forms of economic activity.

Selig said AI should be described as "superintelligence," or SI, underscoring the scale of the technology's impact. He called it a technology as real as the printing press, the steam engine and the internet, adding that it would accelerate a decades-long evolution toward autonomous trading systems.

He also raised the regulatory question of who is responsible for trades executed by AI agents. If an AI agent identifies and executes trades on behalf of a user, he asked, does the developer have a registration obligation? If the agent malfunctions, who is liable?

Identity verification is another challenge. Selig said regulators may need to move beyond traditional know-your-customer, or KYC, standards and consider know-your-agent, or KYA, if nonhuman trading entities act on behalf of others. He added that the crypto industry's experience debating how far regulation should extend to open-source code and interface development could offer a useful reference point.

Brett Harrison, chief executive officer of AI derivatives trading platform Architect, said during the panel that AI now allows firms to analyze unstructured data such as news articles and use it in trading decisions. Large companies are expanding their analytical capabilities, while barriers to entry for smaller firms are also falling, he said.

The CFTC plans to hold a separate roundtable on December 15 focused on 24/7 trading.