The U.S. Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanding oversight responsibilities, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under the Trump administration.
Since 2025, about a quarter of the CFTC's staff has departed, due to President Trump's demands for a reduced federal workforce. However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig stated that AI tools will play a crucial role in surveillance and investigations, citing the use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about staff declines, Selig asserted that the agency is operating more efficiently and effectively.
Committee Chairman Glenn 'GT' Thompson expressed concerns about the CFTC's workload, given the rise of digital assets and prediction markets, and sought assurance that Selig would request help if needed. Selig confirmed that he would do so. He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the next year includes only three additional enforcement staff, leaving the division about 23% shy of its 2025 levels.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in a year.
Selig's predecessor, Rostin Behnam, had argued that the agency needed more resources to oversee crypto and 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 chairman acknowledged numerous ongoing investigations in prediction markets but declined to provide details.
He stated that regulated platforms are the first line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a second line of defense. Selig emphasized that the agency has a 'zero tolerance' policy for illicit market activity and will take action against those who engage in such behavior. However, Representative Angie Craig argued that the agency's workforce is stretched too thin, given its role as the primary regulator of two rapidly growing and volatile markets. Craig emphasized the need for the CFTC to receive adequate staff, funding, and statutory authority to perform its duties.
The regulator's personnel declines include the commission itself, which is supposed to have five members but currently has only Selig. The chairman was questioned about proceeding with major rules as a one-person commission and stated that he cannot slow down rulemaking for the sake of the American people.
The CFTC is pursuing a preliminary rule process to establish guardrails for U.S. prediction markets, and Selig has also pushed policy initiatives in crypto. Committee Chairman Thompson announced plans to send a letter to the White House, encouraging them to fill the vacant commissioner positions with nominees from both parties.