The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address its expanded oversight duties, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under President Donald Trump's administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to Trump's demands for significant reductions in the federal workforce, as per agency records.
However, the CFTC is also being tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig stated that 'tools like AI 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 the staff reductions, Selig asserted that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being given a substantial workload with digital assets and prediction markets, and sought assurance from Selig that he would request assistance from the panel if the need for additional qualified staff arose. Selig responded affirmatively.
He emphasized that proper market enforcement is a 'top priority,' although the CFTC's budget request for the next year only asked for three additional enforcement staff, bringing the total to 108 people, which is still about 23% short of the 140 staff members the division had 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 prominent assets like bitcoin and Ethereum's ether. The agency is also claiming a dominant legal 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 argued that the agency required more personnel to oversee crypto and lacked the resources to police the world as prediction markets expanded.
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 heavy 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 declined to provide specifics.
He stated 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. 'We regularly reject contracts,' Selig noted, adding that his agency has a 'zero tolerance' policy for illicit market activity. Representative Angie Craig argued that the agency's workforce is 'stretched too thin,' particularly considering its role as the primary regulator of two of the fastest-growing and most volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said.
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. 'We cannot slow down our rulemaking for the sake of the American people,' he said, indicating that he will move forward with new regulations alone.
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 stated that he and Craig will be sending a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.