The US Commodity Futures Trading Commission is turning to artificial intelligence and automation to help manage its expanding regulatory duties, according to testimony from Chairman Mike Selig, 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, as a result of demands for federal workforce reduction.
However, the CFTC is also being tasked with overseeing the rapidly growing areas of cryptocurrency and prediction markets. Selig stated that "AI tools will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows," citing the widespread use of Microsoft's Copilot AI tool as a productivity aid. When questioned about staff reductions, Selig asserted that the agency is "operating more efficiently and effectively." Chairman Glenn 'GT' Thompson noted that the committee is placing a significant burden on the CFTC with digital assets and prediction markets, and sought assurance that Selig would request assistance if the need for additional qualified staff arises. Selig confirmed this, stating "absolutely." He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the next year only includes three additional enforcement staff, bringing the total to 108 - still 23% short of the 140 staff members in 2025.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would position the CFTC as a central authority over non-securities crypto trading, including transactions in major assets like bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in the past year.
Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to oversee crypto and lacked the resources to police the growing prediction markets. During Selig's tenure, the prediction markets have faced accusations of insider trading, with some cases being addressed by the firms themselves. However, these markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insight. Selig acknowledged "numerous ongoing investigations" in prediction markets but did not provide further details.
He stated that regulated platforms are the first line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a second line of defense. "We regularly reject contracts, and we are actively reviewing the markets," Selig said, emphasizing the agency's "zero tolerance" policy for illicit activity. 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 sufficient staff, funding, and statutory authority to perform its duties. 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, to which he replied, "We cannot slow down our rulemaking for the sake of the American people." 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 will be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.