The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to navigate its burgeoning oversight responsibilities, according to testimony by Chairman Mike Selig, despite a substantial decline in the agency's workforce under the Trump administration. Since 2025, approximately a quarter of the CFTC's staff has departed, largely due to President Trump's directives to downsize the federal workforce.
Nevertheless, the CFTC is tasked with regulating the rapidly expanding domains of cryptocurrency and prediction markets. Selig informed lawmakers that 'AI tools will be instrumental in surveillance and investigations, and we are integrating them into our workflows.' He cited the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about the staff reductions, Selig asserted that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being entrusted with significant responsibilities, including digital assets and prediction markets, and sought assurance that Selig would request assistance if the need for additional qualified staff arose. Selig confirmed that he would do so.
He emphasized that effective market enforcement is a top priority, although 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 levels. The proposed Digital Asset Market Clarity Act would grant the CFTC a central role in regulating non-securities crypto trading, encompassing transactions involving prominent assets like bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced exponential growth. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto and lacked the necessary 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 insights. Selig acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide specifics.
He stated that regulated platforms serve as the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC acts as a secondary line of defense. 'We regularly reject contracts,' Selig said, 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 overextended, 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 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 if necessary. The CFTC is pursuing a preliminary rulemaking process to establish guidelines 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, urging them to promptly fill the vacant commissioner positions with CFTC nominees from both parties.