The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanding oversight responsibilities, as stated by Chairman Mike Selig in his 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, according to agency records.
However, the CFTC is also being tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig informed lawmakers 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 the staff reductions, Selig stated, 'we are operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted, 'we are placing a significant burden on you with digital assets, and we are clearly moving forward with prediction markets,' and sought assurance from Selig that he would request assistance if the need for additional qualified staff arose. Selig responded, 'absolutely.' He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year only asked for three additional enforcement staff, bringing the total to 108 people, which is still 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 overseeing non-securities crypto trading, including transactions in leading assets like bitcoin and Ethereum's ether.
The agency is also asserting its dominance 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 required more personnel to oversee crypto and lacked the resources to police the prediction markets.
During Selig's tenure, the prediction markets have been plagued by accusations of insider trading, with some cases being addressed by the firms themselves. The markets have drawn intense scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights. Selig acknowledged 'numerous ongoing investigations' in prediction markets but declined to 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.
'We regularly reject contracts,' Selig noted, 'and we are actively reviewing the markets,' 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,' particularly given 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 clear 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. The chairman was questioned repeatedly about this during the oversight hearing, including whether he would proceed with major rules as a one-person commission.
'We cannot slow down our rulemaking for the sake of the American people,' he said, indicating that he will move forward with new regulations alone. 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 stated 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.