The U.S. Commodity Futures Trading Commission (CFTC) is employing artificial intelligence to monitor insider trading activities. This was revealed by the agency's chairman, Michael Selig, in an interview with Wired.
According to him, the agency tracks suspicious behavior among American traders who are "penetrating offshore markets like the prediction platform Polymarket using VPNs."
The CFTC is actively implementing AI automation to manage its increasing workload. These tools autonomously analyze trading patterns and identify potential manipulations.
"We have so much data. When we feed it to AI, we get really valuable insights. This can help us understand certain things, such as where detailed investigations might be needed or in which cases to issue a subpoena to a trader," Selig noted.
In addition to using its own surveillance systems, the regulator collaborates with third-party projects, including Chainalysis and Nasdaq Smarts software.
Moreover, the Commission's investigations are not limited to federal exchanges. Selig clarified that the agency will apply extraterritorial jurisdiction when suspicious activity is detected on offshore platforms like Polymarket.
"We monitor markets on a global scale," emphasized the CFTC chairman.
Currently, there is only one charge of insider trading in the prediction segment in the U.S. Active-duty service member Gannon Ken Van Dyke has been suspected of using confidential information to place bets on Polymarket.
According to the investigation, Van Dyke was involved in the planning and execution of Operation "Absolute Resolve" to capture former Venezuelan President Nicolás Maduro. Having access to classified information about the timing and details of the mission, the military member exploited this for profit.
In April, two accounts on Polymarket were suspected of manipulation after they earned $37,000 from accurate bets on anomalous temperature readings at the Charles de Gaulle Airport weather station in Paris.