The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to cope with substantial new regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a notable 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 significantly, as per agency records. However, the CFTC is also tasked with regulating the rapidly expanding cryptocurrency and prediction markets. Selig emphasized that 'AI tools will be instrumental in surveillance and investigations, and we are integrating them into our workflows,' citing the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about staff reductions, Selig asserted that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a substantial workload with digital assets and prediction markets, and sought assurance that Selig would request assistance if the need for additional qualified staff arises. Selig confirmed that he would do so.
He prioritized proper market enforcement, although the CFTC's budget request for the upcoming year only asked for three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels. The proposed Digital Asset Market Clarity Act would position the CFTC as a central authority over non-securities crypto trading, encompassing transactions in prominent assets like bitcoin and Ethereum. The agency is also asserting dominance 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 required more staff 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 did not provide specifics.
He stated that regulated platforms serve as the first line of defense against insider trading, fraud, and market manipulation, while the CFTC acts as a second line of defense. 'We regularly reject contracts and are actively reviewing the markets,' Selig said, emphasizing the agency's 'zero tolerance' policy for illicit activities. 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. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said.
The personnel decline includes the commission itself, which is supposed to have five members but has been left with only Selig by the White House. Selig was questioned about proceeding with major rules as a one-person commission and stated that he would move forward, suggesting that 'we cannot slow down our rulemaking for the sake of the American people.' The CFTC is pursuing a preliminary rule process for US prediction markets, and Selig has initiated policy initiatives in crypto.
Thompson announced that he and Craig would send a letter to the White House, urging them to fill the vacant commissioner positions with CFTC nominees from both parties.