The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with significant new regulatory responsibilities, according to 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, due to President Trump's demands for federal workforce reductions. However, the CFTC is also tasked with overseeing burgeoning cryptocurrency and prediction markets. Selig emphasized the utility of AI tools in monitoring and investigating these markets, pointing to the widespread adoption of Microsoft's Copilot AI as a key productivity enhancer.
When questioned about staffing declines, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee's Chairman, Glenn 'GT' Thompson, expressed concerns about the agency's capacity to handle its expanded role in regulating digital assets and prediction markets, seeking assurances that Selig would request additional support if needed. Selig confirmed that he would do so, while also prioritizing effective market enforcement. The CFTC's budget request for the upcoming year includes a modest increase in enforcement staff, from 105 to 108 personnel, still short of the 140 employees in the division as of 2025.
The Digital Asset Market Clarity Act, currently under consideration in the Senate, would position the CFTC as a central authority in 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 rapid growth from millions to billions of dollars. Selig's predecessor, Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto markets.
During Selig's tenure, prediction markets have faced accusations of insider trading, with some instances being addressed by the firms themselves. The chairman acknowledged 'numerous ongoing investigations' in prediction markets, although he declined to provide specifics.
He emphasized the importance of regulated platforms as the primary line of defense against illicit activities, with the CFTC serving as a secondary line of defense. Selig reiterated the agency's 'zero tolerance' policy for market manipulation and insider trading, warning that offenders would face the full force of the law. However, Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two rapidly expanding and volatile markets.
Craig advocated for providing the CFTC with sufficient staff, funding, and statutory authority to effectively perform its duties. The regulator's personnel shortages extend to the commission itself, which is legally required to have five members, including two from the minority party, but currently consists solely of Chairman Selig.
Selig was questioned about his intentions to proceed with major rulemaking as a one-person commission, to which he responded that he would not slow down the regulatory process. The CFTC is pursuing preliminary rules to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto.
Committee Chairman Thompson announced plans to send a letter to the White House, urging prompt filling of commissioner positions with nominees from both parties.