The U.S. Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding responsibilities, according to Chairman Mike Selig's testimony before Congress, 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 directives to reduce the federal workforce. However, the CFTC is now tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig emphasized the importance of AI in surveillance and investigations, stating that 'tools such as AI are going to be very helpful in surveilling and bringing the investigations, and we're incorporating that into various workflows.' He also noted the agency's use of Microsoft's Copilot AI tool to enhance productivity. When questioned about staff reductions, Selig asserted that the agency is operating more efficiently and effectively.
Committee Chairman Glenn 'GT' Thompson expressed concerns about the agency's workload, given its role in overseeing digital assets and prediction markets, and sought assurance that Selig would request additional support if needed. Selig confirmed that he would do so. He also emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year only includes three additional enforcement staff members, leaving the division with about 23% fewer personnel than in 2025. The Digital Asset Market Clarity Act, currently being considered by the Senate, would position the CFTC as a central authority over non-securities crypto trading, encompassing transactions involving prominent assets like bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, including those operated by firms like Polymarket and Kalshi, which have experienced rapid growth. Selig's predecessor, Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee the crypto market and police the expanding prediction markets. 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 scrutiny due to certain trades related to U.S.
military actions and government statements, suggesting potential insider trading by individuals with government insights. Selig acknowledged 'numerous investigations ongoing' in the prediction markets but declined to provide specifics. 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. The chairman stated that the agency regularly rejects contracts and is actively reviewing the markets, adhering to a 'zero tolerance' policy for illicit activities.
Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role in regulating two of the fastest-growing and most volatile markets. She emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties effectively.
The regulator's personnel declines include the commission itself, which is legally required to have five members, including two from the minority party, but currently consists only of Chairman Selig. Selig was questioned about proceeding with major rules as a one-person commission and stated that he would move forward with new regulations, citing the need to protect the American people.
The CFTC is currently pursuing a preliminary rulemaking process to establish guidelines for U.S. 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 fill the vacant commissioner positions with nominees from both parties.