The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address its expanding oversight duties, according to Chairman Mike Selig's testimony, 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 demands for significant federal workforce reductions.
However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance productivity and support investigations. When questioned about the staff reductions, Selig stated that the agency is operating more efficiently and effectively. The CFTC is prioritizing the enforcement of proper market regulations, with Selig affirming that it is a top priority.
The agency's budget request for the upcoming year includes a request for only three additional enforcement staff members, which would still leave the division short of its 2025 personnel levels. The Digital Asset Market Clarity Act, currently being developed by the Senate, would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth. Selig acknowledged numerous ongoing investigations into prediction markets, although he did not provide specific details.
He emphasized the importance of regulated platforms in preventing insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. The agency has a zero-tolerance policy for illicit market activity, with Selig warning that those engaging in such behavior will face the full force of the law. 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 staffing, funding, and statutory authority to perform its duties effectively.
The White House has been criticized for leaving the commission with only one member, Chairman Selig, despite the law requiring five members, including two from the minority party. Selig was questioned about the impact of this on the agency's rulemaking process, with him suggesting that he would proceed with new regulations as a one-person commission. The CFTC is currently pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. Committee Chairman Glenn 'GT' Thompson announced plans to send a letter to the White House, encouraging them to promptly fill the vacant commissioner positions with nominees from both parties.