The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address its expanding regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under the Trump administration. Approximately 25% of the CFTC's staff has departed since 2025, due to President Trump's demands for a reduced federal workforce, as per agency records.
However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in surveillance and investigations, and the agency is integrating these tools into its workflows.
He cited the widespread use 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 expressed concerns about the agency's capacity to handle its growing responsibilities, given the staff cuts. Selig assured him that he would request assistance from the panel if the need for additional qualified staff arises. The CFTC is prioritizing enforcement, with Selig stating that it is a 'top priority.' However, the agency's budget request for the next year includes only three additional enforcement staff, which would still be 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 involving leading assets like bitcoin and Ethereum.
The agency is also claiming jurisdiction 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 needed more personnel to oversee crypto and lacked the resources to police the growing 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 scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insight. Selig acknowledged 'numerous investigations' in the prediction markets but declined to provide details. He emphasized 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.
The chairman stated that the agency has a 'zero tolerance' policy for illicit market activity and will take action against those who engage in such behavior. 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 rapidly growing and volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties.
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 proceeding with major rules as a one-person commission and stated that he would move forward with new regulations, despite the challenges. 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 and Craig plan to send a letter to the White House, urging them to fill the vacant commissioner positions with CFTC nominees from both parties.