The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanded oversight duties, according to Chairman Mike Selig's congressional testimony, 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, following Trump's call for substantial reductions in the federal workforce, as per agency records. However, the CFTC is also being tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig stated that AI tools are being utilized to enhance surveillance and investigations, citing the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid. When questioned about the staffing decline, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, expressed concerns about the agency's capacity to handle its growing responsibilities, including digital assets and prediction markets, and sought assurance that Selig would request additional qualified staff if needed. Selig confirmed that he would do so.
He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year only includes three additional enforcement staff, leaving the division about 23% short of its 2025 level. 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 prominent assets like bitcoin and Ethereum.
The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to effectively oversee crypto and 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 chairman acknowledged numerous ongoing investigations in the prediction markets but declined to provide specifics. He noted 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. Selig emphasized 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 rapidly growing and volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties effectively. The personnel decline at the regulator includes 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 indicated that he would move forward with new regulations. 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 announced that he and Craig would be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.