The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with its expanding oversight responsibilities, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under the Trump administration. Since 2025, about a quarter of the CFTC's staff has departed, owing to President Trump's demand for significant 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, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations, and are being integrated into various workflows.
When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently. Committee Chairman Glenn 'GT' Thompson expressed concern about the CFTC's ability to handle its increased responsibilities, given the staffing cuts. Selig assured him that if the need for additional qualified staff arises, he will request assistance from the panel.
The CFTC is currently pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. The agency'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 staffing 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 leading assets such as bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, including those operated by firms like Polymarket and Kalshi, which have experienced significant growth.
Selig acknowledged numerous ongoing investigations in the prediction markets but declined to provide further details. He emphasized that regulated platforms are the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. Selig stated that the agency has a zero-tolerance policy for illicit market activity and will take decisive action against those who engage in such behavior. However, Representative Angie Craig 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 proceeding with major rules as a one-person commission and indicated that he would move forward with new regulations. Thompson and Craig plan to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.