The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to manage its expanded oversight duties, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under President Donald Trump's administration. Approximately a quarter of the CFTC's staff has departed since 2025, following Trump's directive to reduce the federal workforce substantially, as per agency records. However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig informed lawmakers that 'tools like AI will be highly beneficial in monitoring and conducting investigations, and we are integrating them into our workflows.' He cited the widespread use of Microsoft's Copilot AI tool as a productivity aid. When questioned about the staff reductions at his agency, 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 proceeding with prediction markets.' He sought assurance from the CFTC chief that if the need for additional qualified staff arises, he will request assistance from the panel.
Selig responded, 'absolutely.' He emphasized that proper market enforcement is a 'top priority,' although the CFTC's budget request for the upcoming year includes only three additional enforcement staff, bringing the total to 108 people - still 23% short of the 140 staff members 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 prominent assets like bitcoin and Ethereum's ether. The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in the past year.
Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to oversee crypto and lacked the resources to police the expanding 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 markets have drawn intense scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insight. Selig acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide specifics. He stated that regulated platforms serve as the first line of defense against insider trading, fraud, and market manipulation, while the CFTC acts as a second line of defense.
'We regularly reject contracts,' Selig noted, adding that his 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 statutory authority to perform its duties,' Craig said. The personnel decline at the regulator includes the commission itself, which is supposed to have five members, including two commissioners from the minority party, but has been left with only Selig by the White House.
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 guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson stated that he and Craig will send a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.