The US Commodity Futures Trading Commission is embracing 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 President Donald Trump's administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to Trump's demands for federal workforce reductions, as per agency records. However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig stated that 'AI tools will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows,' citing the widespread use of Microsoft's Copilot AI tool as a productivity aid. When questioned about the 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 sought assurance from Selig that he would request assistance if the need for additional qualified staff arises. Selig confirmed that he would do so.
He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year includes only three additional enforcement staff, bringing the total to 108 people, which is still 23% short of the 140 staff members the division had in 2025. The proposed Digital Asset Market Clarity Act would position the CFTC as a central authority over non-securities crypto trading, encompassing transactions in prominent assets such as bitcoin and Ethereum's ether. The agency is also asserting its jurisdiction over prediction markets, including those operated by leading firms Polymarket and Kalshi, which have experienced significant growth from millions to billions of dollars. 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. The markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights.
Selig acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide further details. He stated 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.
'We regularly reject contracts, and we are actively reviewing the markets,' Selig said, emphasizing the agency's 'zero tolerance' policy for illicit activities. Representative Angie Craig argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two rapidly growing and volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said. 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. 'We cannot delay our rulemaking for the sake of the American people,' he said, indicating that he will move forward with new regulations alone if necessary. The CFTC is pursuing a preliminary rulemaking process to establish guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig will send a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.