The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address substantial new regulatory duties, according to Chairman Mike Selig's congressional testimony, despite a notable 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 mandate for significant federal workforce reductions, as per agency records. However, the CFTC is also tasked with regulating emerging and rapidly expanding cryptocurrency and prediction markets. Selig emphasized that AI tools will be instrumental in enhancing surveillance and facilitating investigations, citing the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about staff reductions, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a substantial workload with digital assets and prediction markets, seeking assurance that Selig would request assistance if the need for additional qualified staff arises. Selig confirmed this, stating 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 personnel count. 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's ether.
The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth from millions to billions of dollars. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto and lacked the necessary resources to police the expanding prediction markets.
During Selig's tenure, the prediction markets have faced accusations of insider trading, with some instances being addressed by the firms themselves. The markets have drawn scrutiny due to certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights. Selig acknowledged numerous ongoing investigations in prediction markets but declined to provide specifics. He emphasized 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.
The chairman noted that his agency regularly rejects contracts and is actively reviewing market activity, maintaining a 'zero tolerance' policy for illicit market behavior. Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overextended, particularly given its role as the primary regulator of two rapidly growing and volatile markets. Craig stressed the need to provide the CFTC with sufficient staff, funding, and statutory authority to fulfill its duties. The regulator's personnel decline includes the commission itself, which is legally required to have five members, including two minority party commissioners, but has been left with only Selig by the White House.
Selig was questioned about proceeding with major rules as a one-person commission, to which he replied that he cannot slow down the rulemaking process for the sake of the American people and will move forward with new regulations. The CFTC is currently 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, along with Representative Craig, to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.