The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to cope with significant new regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under President Donald Trump's administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to Trump's demands for federal workforce reductions, as per agency records. However, the CFTC is also tasked with overseeing burgeoning cryptocurrency and prediction markets.
Selig stated that 'tools like AI will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows,' citing the widespread use of Microsoft's Copilot AI tool as a productivity aid. When questioned about staff declines, 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 this, emphasizing that proper market enforcement is a 'top priority.' The CFTC's budget request for the upcoming year includes only three additional enforcement staff, which would still be about 23% short of the 140 personnel the division had in 2025. The proposed Digital Asset Market Clarity Act would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum's ether.
The agency is also claiming jurisdiction over prediction markets, which have grown from millions to billions of dollars in a year. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel 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 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 insight. Selig acknowledged 'numerous ongoing investigations' in prediction markets but did not provide specifics. 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.
The chairman emphasized that the agency has a 'zero tolerance' policy for illicit market activity, and those engaging in such behavior will face the full force of the law. However, Representative Angie Craig argued that the agency's workforce is 'stretched too thin,' particularly considering its role as the primary regulator of two rapidly growing and volatile markets. Craig stressed that the CFTC needs 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 has been left with only Selig by the White House.
The chairman was questioned about proceeding with major rules as a one-person commission, to which he replied that 'we cannot slow down our rulemaking for the sake of the American people.' The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig will be sending a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.