The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address its expanded oversight duties, according to Chairman Mike Selig's testimony before Congress, 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 a reduced federal workforce. Nevertheless, the CFTC is now tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance productivity and support investigations. When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively.
The committee's chairman, Glenn 'GT' Thompson, expressed concerns about the CFTC's capacity to handle its increased responsibilities, particularly in the context of 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 staff members the division had in 2025. The Digital Asset Market Clarity Act, currently being considered by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, including 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 significant growth in recent years.
Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee the crypto market. 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 due to certain trades related to US military actions and government statements, which suggest the potential for insider trading by individuals with government connections. Selig confirmed that 'numerous investigations' are ongoing in the prediction markets, although he declined to provide further details.
He emphasized 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. The chairman reiterated the agency's 'zero tolerance' policy for illicit market activity, stating that anyone 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 emphasized the need to provide the CFTC with adequate staff, funding, and statutory authority to fulfill its responsibilities. 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 about the commission's vacancies and whether he would proceed with major rule-making decisions as a one-person commission. Selig indicated that he would not slow down the rule-making process, suggesting that he would move forward with new regulations as needed. The committee's chairman and top Democrat announced plans to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.