The U.S. Commodity Futures Trading Commission is embracing artificial intelligence and automation to address its expanding regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under President Donald Trump's administration.
Approximately a quarter of the CFTC's staff has departed since 2025, due to Trump's demands for federal workforce reductions, as per agency records. However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig informed lawmakers that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations, and that the agency is operating more efficiently despite staffing cuts. The CFTC is prioritizing enforcement, with a focus on digital assets and prediction markets, although its budget request for the upcoming year includes only a modest increase in enforcement staff.
The agency is claiming jurisdiction over prediction markets, including those operated by prominent firms like Polymarket and Kalshi, which have experienced significant growth. Selig acknowledged multiple ongoing investigations in prediction markets, emphasizing the importance of regulated platforms in preventing insider trading and market manipulation.
The CFTC is adopting a 'zero tolerance' policy towards illicit activities, with Selig stating that those engaging in such behavior will face the full force of the law. However, some lawmakers have expressed concerns that the agency's workforce is stretched too thin, particularly given its role as the primary regulator of two rapidly growing and volatile markets. The committee's top Democrat, Representative Angie Craig, argued that the CFTC requires additional staff, funding, and statutory authority to effectively perform its duties.