The U.S. Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanded oversight duties, 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, due to President Trump's demand for significant reductions in the federal workforce. However, the CFTC is also tasked with regulating the rapidly growing arenas of cryptocurrency and prediction markets.
Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations, and are being integrated into various workflows. When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively.
Committee Chairman Glenn 'GT' Thompson expressed concern about the CFTC's workload, particularly with regards to digital assets and prediction markets, and sought assurance that Selig would request assistance if needed. 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 only includes 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 worked on by the Senate, would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving bitcoin and Ethereum.
The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth. Selig's predecessor, Rostin Behnam, had argued that the agency required more personnel to oversee crypto and lacked the resources to 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.
The chairman acknowledged numerous ongoing investigations in the 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. Selig emphasized that his agency has a zero-tolerance policy for illicit market activity and will take swift action against those who engage in such behavior. However, 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.
She emphasized the need for the CFTC to receive adequate staffing, funding, and statutory authority to effectively perform its duties. The personnel declines at the regulator include the commission itself, which is supposed to have five members, but currently only has 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. The CFTC is currently pursuing a preliminary rule process to establish guardrails for U.S.
prediction markets, and Selig has also initiated policy initiatives in crypto. 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.