The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanding regulatory responsibilities, according to testimony by Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Since 2025, about a quarter of the CFTC's staff has departed, owing to President Trump's demands for a reduced federal workforce. 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, citing the widespread use of Microsoft's Copilot AI as a productivity aid. When questioned about staffing declines, Selig asserted that the agency is operating more efficiently. Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a substantial role in regulating digital assets and prediction markets, and sought assurance that Selig would request assistance if the need for additional 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 leave the division about 23% short of its 2025 personnel.
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 claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth.
Selig's predecessor, Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto and 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 chairman acknowledged numerous ongoing investigations in prediction markets but declined to provide specifics.
He emphasized that regulated platforms serve as the primary line of defense against illicit activities, while the CFTC acts as a secondary line of defense. Selig noted that the agency regularly rejects contracts and is actively reviewing market activity, adhering to a 'zero tolerance' policy for illicit behavior.
Representative Angie Craig argued that the agency's workforce is overextended, particularly given its role as the primary regulator of two rapidly growing and volatile markets. Craig emphasized the need for the CFTC to receive adequate staffing, funding, and statutory authority to perform its duties effectively. The regulator's personnel declines 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. The CFTC is pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in crypto. Chairman Thompson announced plans to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.