The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to cope with significant new oversight duties, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under President Donald Trump's administration. Approximately a quarter of the CFTC's staff have left since 2025, due to Trump's demands for reducing the federal workforce, as per agency records. However, the CFTC is also being tasked with regulating the rapidly growing areas of cryptocurrency and prediction markets.
Selig stated that AI tools will be instrumental in monitoring and investigating these markets, and the agency is integrating them into various workflows. He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about the staff decline, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being given a lot of responsibility with digital assets and prediction markets, and he sought assurance from Selig that he would request help from the panel if the need for additional qualified staff arises. Selig confirmed that he would do so. He emphasized that proper enforcement of the markets is a top priority, although the CFTC's budget request for next year only asked for three more enforcement staff, which would still be about 23% short of the 140 personnel the division had in 2025.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would put the CFTC at the forefront of regulating non-securities crypto trading, including transactions in leading assets like bitcoin and Ethereum's ether. The agency is also claiming a dominant legal jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in a year. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency needed more personnel to oversee crypto and lacked the resources to police the prediction markets.
During Selig's tenure, the prediction markets have been embroiled in accusations of insider trading, with some cases being addressed by the firms themselves. The markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insight.
Selig acknowledged numerous ongoing investigations in prediction markets but did not provide further details. He stated 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.
The chairman noted that his agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity. Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is stretched too thin, particularly considering 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. The personnel decline at the regulator includes 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 would move forward with new regulations, as slowing down the rulemaking process would not be in the best interest of the American people. The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also pushed policy initiatives in crypto.
Committee Chairman Thompson announced that he and Craig would be sending a letter to the White House to encourage them to fill the vacant commissioner positions with CFTC nominees from both parties.