The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding oversight duties, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff has departed since 2025, following President Trump's directive to reduce the federal workforce.
However, the CFTC is now responsible for regulating the rapidly growing cryptocurrency and prediction markets. Selig emphasized the importance of AI in surveillance and investigations, stating that 'tools like AI will be extremely helpful in monitoring and conducting investigations, and we are integrating them into our workflows.' When questioned about staff reductions, Selig asserted that the agency is operating more efficiently. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, expressed concern about the agency's capacity to handle its new responsibilities, particularly with regard to digital assets and prediction markets. Selig assured the committee that he would request assistance if needed.
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 sector. The agency's budget request for the upcoming year includes a request for only three additional enforcement staff members, which would still leave the division with approximately 23% fewer personnel than in 2025.
The Digital Asset Market Clarity Act, currently being developed by the Senate, would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum. The agency is also claiming 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 consistently 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 ongoing investigations' in prediction markets but 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 stated that the agency has a 'zero tolerance' policy for illicit market activity and would take swift action against those engaging in such behavior. However, Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets.
Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties effectively. 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 proceeding with major rules as a one-person commission and indicated that he would move forward with new regulations.
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 sector. Committee Chairman Thompson announced plans to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.