The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to address its increased regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a significant 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 federal workforce reductions.
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, and the agency is integrating them into various workflows. He cited the widespread use of Microsoft's Copilot AI tool as a productivity aid.
When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concern about the CFTC's ability to handle its expanded responsibilities, particularly with regard to digital assets and prediction markets.
Selig assured him that if the need for additional qualified staff arises, he will request assistance from the panel. The CFTC chief emphasized that proper market enforcement is a top priority, although the agency's budget request for the next year only includes three additional enforcement staff, bringing the total to 108 people, which is still 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 grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving leading assets such as bitcoin and Ethereum's ether.
The agency is also claiming jurisdiction over prediction markets, including those operated by prominent firms like Polymarket and Kalshi, which have experienced significant growth from millions to billions of dollars. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency needed more personnel to effectively oversee crypto and prediction markets.
During Selig's tenure, the prediction markets have been marred by accusations of insider trading, with some cases being addressed by the firms themselves. The markets have drawn scrutiny due to certain trades related to US military actions and government statements, which suggest the potential for insider trading by individuals with government insight.
Selig acknowledged that numerous investigations are ongoing in the prediction markets but declined to provide specifics. He emphasized 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 noted that the agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity. Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The personnel declines at the regulator 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 stated 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 promoted policy initiatives in crypto.
Thompson announced that he and Craig will send a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.