The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to manage its increased oversight responsibilities, 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, due to President Trump's demands for federal workforce reductions, as recorded in agency documents. However, the CFTC is also tasked with regulating the rapidly expanding cryptocurrency and prediction markets.
Selig stated that AI tools, such as Microsoft's Copilot, are being integrated into various workflows to enhance surveillance and investigations. 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 growing responsibilities, particularly with regards to digital assets and prediction markets.
Selig confirmed that he would request assistance from the committee if the need for additional qualified staff arises. He emphasized that enforcing market regulations is a top priority, although the CFTC's budget request for the upcoming year only includes three additional enforcement staff members, leaving the division about 23% short of its 2025 personnel. The proposed Digital Asset Market Clarity Act 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 asserting its 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 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 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 his agency regularly rejects contracts and is actively reviewing market activities, 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 growing and volatile markets.
Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to fulfill its responsibilities. The regulator's personnel declines include the commission itself, which is legally required to have five members, including two minority party commissioners, but currently only has Selig.
The chairman was questioned about proceeding with major rules as a one-person commission and responded that he would not slow down the rulemaking process. The CFTC is pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto. Committee Chairman Thompson announced plans to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.