The U.S. Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with significant new regulatory responsibilities, according to testimony from Chairman Mike Selig, despite a substantial decline in the agency's workforce under the Trump administration.
Approximately a quarter of the CFTC's staff has departed since 2025, due to demands for federal workforce reductions. However, the agency is also tasked with overseeing the rapidly expanding arenas of cryptocurrency and prediction markets. Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance productivity and facilitate investigations.
When questioned about staff reductions, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee expressed concerns about the CFTC's capacity to regulate digital assets and prediction markets, with Chairman Glenn 'GT' Thompson seeking assurance that Selig would request additional support if needed. Selig confirmed that proper market enforcement is a top priority, although the agency's budget request for the upcoming year includes only a modest increase in enforcement staff.
The Digital Asset Market Clarity Act, currently being considered by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving prominent assets like bitcoin and ether. The agency is also claiming jurisdiction over prediction markets, which have grown significantly in recent years. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to effectively oversee crypto and 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 investigations ongoing' in prediction markets, but declined to provide further details. He emphasized that regulated platforms are the primary line of defense against illicit activities, while the CFTC serves as a secondary line of defense. Selig stated that the agency has a 'zero tolerance' policy for market manipulation and insider trading, and that those engaging in such behavior will face severe consequences.
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 for the CFTC to receive adequate staffing, funding, and statutory authority to fulfill its responsibilities.
The personnel declines at the regulator include the commission itself, which is supposed to have five members but currently consists of only Chairman Selig. The committee expressed concerns about the impact of this on the agency's rulemaking process, with Selig indicating that he will proceed with new regulations despite the commission's reduced membership. The CFTC is pursuing a preliminary rule process to establish guardrails for U.S.
prediction markets, and Selig has also initiated policy initiatives in crypto. The committee plans to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.