The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its growing responsibilities, including the regulation of cryptocurrencies and prediction markets, according to Chairman Mike Selig's congressional testimony. Despite a significant decline in the agency's workforce under the Trump administration, with about a quarter of staff leaving since 2025, Selig emphasized that AI tools are being leveraged to enhance surveillance and investigations. The CFTC is incorporating AI into its workflows, with Selig citing the use of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee Chairman Glenn 'GT' Thompson expressed concerns about the agency's capacity to handle its expanded role in digital assets and prediction markets, seeking assurance that Selig would request additional support if needed. Selig confirmed that proper enforcement of the markets is a top priority, although the agency's budget request for the next year includes only three additional enforcement staff. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of regulating non-securities crypto trading, including transactions involving major assets like bitcoin and Ethereum.
The agency is also claiming jurisdiction over prediction markets, which have grown significantly in recent years. Selig acknowledged numerous ongoing investigations in prediction markets but declined to provide further details. He emphasized 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 reiterated the agency's zero-tolerance policy for illicit market activity, warning that those engaging in such behavior will face the full force of the law. However, Representative Angie Craig argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two rapidly growing and volatile markets. Craig stressed the need for the CFTC to receive adequate staff, funding, and statutory authority to perform its duties effectively. The White House has been criticized for leaving the commission with a solitary posting, and Selig was questioned about his plans to proceed with major rules as a one-person commission.
He indicated that he would move forward with new regulations, including a preliminary rule process to establish guardrails for US prediction markets. The committee chairman and top Democrat plan to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.