The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanding regulatory duties, according to congressional testimony from Chairman Mike Selig, despite a substantial decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff has departed since 2025, following President Trump's directive to downsize the federal workforce. However, the CFTC is also tasked with overseeing the rapidly growing cryptocurrency and prediction markets.
Selig informed lawmakers that 'tools like AI will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows.' He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about staff reductions, Selig stated that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a significant workload with digital assets and prediction markets, and he sought assurance from Selig that he would request assistance from the panel if the need for additional qualified staff arises. Selig responded affirmatively, emphasizing that proper market enforcement is a top priority for him. Although the CFTC's budget request for the upcoming year includes only three additional enforcement staff, bringing the total to 108 people, which is still 23% short of the 140 staff members in 2025.
The proposed Digital Asset Market Clarity Act would grant the CFTC a central role in regulating non-securities crypto trading, encompassing transactions involving prominent assets like bitcoin and Ethereum. The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth from millions to billions of dollars.
Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to oversee crypto and lacked the resources to police the expanding prediction markets. During Selig's tenure, the prediction markets have faced accusations of insider trading, with some cases being addressed by the firms themselves. The markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights.
Selig acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide specifics. He stated that regulated platforms are the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. The chairman noted that the agency 'regularly rejects contracts' and is 'actively reviewing' the markets, emphasizing a 'zero tolerance' policy for illicit activities.
Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is 'stretched too thin,' particularly given its role as the primary regulator of two rapidly growing and volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The personnel decline at the regulator includes the commission itself, which is supposed to have five members but has been left with only Selig.
The chairman was questioned about proceeding with major rules as a one-person commission and responded that 'we cannot slow down our rulemaking for the sake of the American people.' The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig will send a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.