The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to manage its increased regulatory duties, according to testimony by 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 mandate to reduce the federal workforce. However, the CFTC is also tasked with overseeing the rapidly growing cryptocurrency and prediction markets.
Selig stated that AI tools will be instrumental in surveillance and investigations, citing the widespread 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. The House Agriculture Committee's Chairman, Glenn 'GT' Thompson, expressed concern about the agency's capacity to handle its expanded responsibilities and requested assurance that Selig would seek assistance 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 upcoming year includes only three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels. The Digital Asset Market Clarity Act, currently being considered by the Senate, would position the CFTC as a central authority over non-securities crypto trading, including transactions involving prominent assets like bitcoin and Ethereum's ether. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth.
Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto and prediction markets. During Selig's tenure, the prediction markets have faced allegations of insider trading, with some cases being addressed by the firms themselves. The chairman acknowledged numerous ongoing investigations in the prediction markets but declined to provide specifics.
He emphasized that regulated platforms serve as the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC acts as a secondary line of defense. Selig stated that the agency regularly rejects contracts and is actively reviewing market activity, with a 'zero tolerance' policy for illicit behavior.
Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overextended, 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 effectively. The declines in the regulator's personnel include 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 indicated that he would move forward with new regulations. The CFTC is pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig would be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.