The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its growing oversight responsibilities, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under President Donald Trump's administration. With about a quarter of the CFTC's staff departing since 2025 due to federal workforce reduction demands, the agency is also tasked with regulating the rapidly expanding cryptocurrency and prediction markets. Selig emphasized that AI tools will be instrumental in surveillance and investigations, citing the use of Microsoft's Copilot AI as a productivity aid.
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 role, particularly in digital assets and prediction markets, and sought assurance that Selig would request additional qualified staff if needed. Selig confirmed that he would do so, stating that proper market enforcement is a top priority. The CFTC's budget request for the next year includes only three additional enforcement staff, which would still leave the division about 23% short of its 2025 personnel levels.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of non-securities crypto trading regulation, 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.
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 expanding prediction 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 did not provide specifics. He emphasized that regulated platforms are the primary defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense.
Selig noted that his agency has a zero-tolerance policy for illicit market activity and will take 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 rapidly growing and volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties.
The regulator's personnel decline 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, including a preliminary rule process for US prediction markets and policy initiatives in crypto. Committee Chairman Thompson announced plans to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.