The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding oversight responsibilities, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under President Donald Trump's administration. Since 2025, about a quarter of the CFTC's staff has departed, due to Trump's demands for a reduced federal workforce.
However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in monitoring and investigating these markets, and the agency is incorporating them into its workflows.
He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively.
Committee Chairman Glenn 'GT' Thompson expressed concerns about the CFTC's ability to handle its new responsibilities, given the staff declines, and sought assurance that Selig would request help if needed. Selig responded affirmatively, emphasizing 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 staffing level. The Digital Asset Market Clarity Act, currently being considered by the Senate, would elevate the CFTC's role in overseeing non-securities crypto trading, including transactions in assets like bitcoin and Ethereum.
The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown significantly in the past year. Selig's predecessor, Rostin Behnam, had argued that the agency needed more resources 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 the prediction markets but declined to provide specifics.
He emphasized that regulated platforms are the first line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a second line of defense. Selig stated that the agency has a 'zero tolerance' policy for illicit market activity and will take action against those who engage in it.
However, Representative Angie Craig argued that the agency's workforce is stretched too thin, 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 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 stated that he will move forward with new regulations, including a preliminary rule process for US prediction markets. Committee Chairman Thompson announced plans to send a letter to the White House, encouraging them to fill the vacant commissioner positions with nominees from both parties.