The U.S. Commodity Futures Trading Commission (CFTC) is employing artificial intelligence to monitor insider trading. This was revealed by the regulator’s chairman, Michael Selig, in an interview with Wired.
According to him, the agency tracks suspicious behavior of American traders who “infiltrate offshore markets like the prediction platform Polymarket using VPNs.”
The CFTC is actively implementing AI automation to ease the growing workload. The tools independently analyze trading patterns and identify potential manipulations.
“We have so much data. When we feed it to AI, we get really valuable insights. It can help us understand things like where a detailed investigation might be needed or when 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 confined to federal exchanges. Selig clarified that the agency will apply extraterritorial jurisdiction when detecting suspicious activity on offshore platforms like Polymarket.
“We monitor markets on a global scale,” emphasized the CFTC chairman.
Currently, only one insider trading charge has been filed in the prediction segment in the U.S. Active military member Gannon Ken Van Dyke was suspected of using confidential information for betting on Polymarket.
According to the investigation, Van Dyke was involved in planning and executing 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 officer used it for profit.
Back in April, two accounts on Polymarket were suspected of manipulation after they earned $37,000 on correct bets on abnormal temperature readings at the weather station in Paris Charles de Gaulle Airport.