The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address significant new regulatory duties, according to Chairman Mike Selig's congressional testimony, despite a substantial 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 federal workforce reductions. However, the CFTC is also tasked with overseeing burgeoning cryptocurrency and prediction markets.
Selig stated that AI tools will be instrumental in surveillance and investigations, citing the widespread adoption of Microsoft's Copilot AI as a key productivity enhancer. When questioned about 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 expanded responsibilities, particularly with regards to digital assets and prediction markets.
Selig assured the committee that he would request assistance if necessary. 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 sector. The agency's budget request for the upcoming year includes a modest increase in enforcement staff, from 105 to 108 personnel, still short of the 140 employees the division had in 2025. The Digital Asset Market Clarity Act, currently under consideration in the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, encompassing transactions in prominent assets such as bitcoin and ether.
The agency is also asserting its jurisdiction over prediction markets, including prominent firms like Polymarket and Kalshi, which have experienced rapid growth. Selig's predecessor, former Chairman Rostin Behnam, had consistently 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 addressed by the firms themselves. The chairman acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide specifics. 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. Selig noted that the agency regularly rejects contracts and is actively reviewing market activity, with a 'zero tolerance' policy for illicit 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 expanding and volatile markets. Craig emphasized the need to provide the CFTC with adequate staff, funding, and statutory authority to fulfill its obligations. 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 committee plans to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.