The US Commodity Futures Trading Commission is turning to artificial intelligence and automation to fulfill its growing oversight duties, according to Chairman Mike Selig's congressional testimony. The agency faces significant new responsibilities, particularly in the areas of cryptocurrency and prediction markets, despite a substantial decline in its workforce under the Trump administration. Approximately 25% of the CFTC's staff has departed since 2025, due to President Trump's demands for federal workforce reductions.
However, the CFTC is also tasked with regulating the rapidly expanding crypto and prediction markets. Selig emphasized the importance of AI in surveillance and investigations, citing the use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about staff declines, Selig asserted that the agency is operating more efficiently and effectively.
The House Agriculture Committee's Chairman, Glenn 'GT' Thompson, expressed concerns about the CFTC's capacity to handle its expanded responsibilities, particularly with regards to digital assets and prediction markets. Selig assured the committee that he would request assistance if the need for additional qualified staff arises. The CFTC is currently pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. The agency's budget request for the upcoming year includes a request for only three additional enforcement staff, which would still leave the division approximately 23% short of its 2025 staffing levels.
The Digital Asset Market Clarity Act, currently being considered by the Senate, would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving leading assets such as bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, including those operated by firms like Polymarket and Kalshi, which have experienced significant growth in recent years. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee the 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 that numerous investigations are ongoing in the prediction markets, although he declined to provide further details. 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. Selig noted that the agency regularly rejects contracts and is actively reviewing the markets to ensure compliance with regulations.
The committee's top Democrat, 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 has been left with only Selig. The chairman was questioned about the impact of this on the agency's rulemaking process, and he indicated that he would proceed with major rules despite the lack of commissioners. The CFTC is pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. Thompson and Craig plan to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.