The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to offset the impact of significant staff reductions, according to testimony by Chairman Mike Selig. Despite a decline of approximately 25% in the agency's workforce since 2025, largely due to President Donald Trump's demands for a leaner federal workforce, the CFTC is tasked with overseeing the rapidly expanding realms of cryptocurrency and prediction markets.
Selig emphasized the importance of AI in facilitating the agency's surveillance and investigative efforts, highlighting the utilization of Microsoft's Copilot AI tool to enhance productivity. When questioned about the staff shortages, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee's Chairman, Glenn 'GT' Thompson, expressed concerns about the agency's capacity to handle its increasing responsibilities, particularly with regard to digital assets and prediction markets. Selig assured the committee that he would request additional support if needed.
The CFTC is currently pursuing a preliminary rule-making process to establish guidelines for the US prediction markets, and Selig has also initiated policy initiatives in the crypto sector. The agency's budget request for the upcoming year includes a modest increase in enforcement staff, from 105 to 108 personnel, which still falls short of the 140 employees the division had in 2025. The Digital Asset Market Clarity Act, currently under consideration in the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, encompassing transactions in prominent assets like bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, including those operated by firms such as Polymarket and Kalshi, which have experienced rapid growth from millions to billions of dollars in transactions. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee the crypto sector. During Selig's tenure, the prediction markets have been marred by allegations of insider trading, with some cases being addressed by the firms themselves. The chairman acknowledged the existence of numerous ongoing investigations in the prediction markets but declined to provide further details.
He emphasized the regulated platforms' role as the primary line of defense against illicit activities, with the CFTC serving as a secondary line of defense. Selig reiterated the agency's 'zero tolerance' policy for market manipulation and insider trading, warning that those engaging in such behavior would face the full force of the law. However, 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 urged that the CFTC be provided with the necessary staff, funding, and statutory authority to fulfill its responsibilities.
The personnel shortages 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 his plans to proceed with major rule-making as a one-person commission, to which he responded that he would not slow down the agency's rule-making process. The CFTC is currently pursuing a preliminary rule-making process to establish guidelines for the US prediction markets, and Selig has also initiated policy initiatives in the crypto sector. Thompson announced that he and Craig would be sending a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.