The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a substantial 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 demands for significant cuts to the federal workforce, as per agency records. However, the CFTC is also being tasked with overseeing the rapidly growing cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in surveillance and investigations, and the agency is incorporating them into various workflows, citing the widespread use of Microsoft's Copilot AI tool as a productivity aid.
When questioned about staff declines, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a substantial workload with digital assets and prediction markets, and he sought assurance from Selig that if the need for additional qualified staff arises, he will request assistance from the panel. Selig confirmed that proper market enforcement is a top priority, although the CFTC's budget request for the next year only asks for three additional enforcement staff, which would still be about 23% short of the 140 staff members the division had in 2025. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of regulating non-securities crypto trading, including transactions in leading assets such as bitcoin and Ethereum's ether.
The agency is also claiming jurisdiction over prediction markets, including those operated by firms like 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 required more personnel to oversee crypto and lacked the resources to regulate 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, certain trades related to US military actions and government statements have drawn scrutiny, suggesting potential insider trading by individuals with government insights.
Selig acknowledged numerous ongoing investigations in prediction markets but declined to provide specifics. 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 emphasized that his agency has a zero-tolerance policy for illicit market activity and will take action against those who engage in such behavior. Representative Angie Craig 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 the necessary 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 by the White House.
The chairman was questioned about proceeding with major rules as a one-person commission and stated that he cannot slow down the rulemaking process for the sake of the American people. The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto. Committee Chairman Thompson announced that he and Craig will be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.