The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its growing responsibilities, according to Chairman Mike Selig's testimony to Congress, despite a significant decline in the agency's workforce under the Trump administration. With about a quarter of the CFTC's staff having left since 2025, the agency is still expected to regulate the rapidly expanding cryptocurrency and prediction markets. Selig emphasized that 'tools like AI will be extremely helpful 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 the staff reductions, Selig stated that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being given a lot to handle with digital assets and prediction markets, and he sought assurance from Selig that he would request help from the panel if the need for additional qualified staff arose.
Selig confirmed that he would do so. He also asserted that proper market enforcement is a top priority, although the CFTC's budget request for the next year only asks for three more enforcement staff, which would still be about 23% short of the 140 staff members the division had in 2025. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC in a central role over non-securities crypto trading, including transactions in leading 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 grown from millions to billions of dollars in a year.
Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency needed more staff to oversee crypto and lacked the resources to police the 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 insight.
Selig acknowledged 'numerous ongoing investigations' in the prediction markets but did not provide further 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. 'We regularly reject contracts, and we are actively reviewing the markets,' Selig said, adding that the agency has a 'zero tolerance' policy for illicit market activity.
Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is stretched too thin, considering its role as the primary regulator of two of the fastest-growing and most volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said. The personnel declines at the regulator include 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 with new regulations, suggesting that he cannot slow down the rulemaking process 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 pushed policy initiatives in crypto. Thompson said he and Craig would send a letter to the White House to encourage them to fill the commissioner positions with CFTC nominees from both parties.