The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to navigate significant new 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, amid demands for federal workforce reductions. However, the CFTC is also being tasked with overseeing burgeoning cryptocurrency and prediction markets. Selig noted that AI tools will be instrumental in surveillance and investigations, citing the widespread use of Microsoft's Copilot AI as a key productivity aid.
When questioned about staffing declines, Selig asserted that the agency is operating more efficiently and effectively. The committee chairman, Glenn 'GT' Thompson, requested assurance that Selig would seek help if the need for additional qualified staff arises, to which Selig agreed.
Selig emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the next year includes only three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would elevate the CFTC's role in non-securities crypto trading, including transactions involving major assets like bitcoin and Ethereum.
The agency is also claiming jurisdiction over prediction markets, which have grown significantly in the past year. 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, prediction markets have faced accusations of insider trading, with some cases being addressed by the firms themselves. The chairman acknowledged numerous ongoing investigations in prediction markets but did not provide specifics.
He emphasized that regulated platforms are the primary defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. Selig noted that his agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activities. Representative Angie Craig argued that the agency's workforce is overextended, particularly given its role as the primary regulator of two rapidly growing and volatile markets.
Craig emphasized the need for the CFTC to receive sufficient staff, funding, and statutory authority to perform its duties. The regulator's personnel declines include the commission itself, which is supposed to have five members but currently consists of only Selig. The chairman was questioned about proceeding with major rules as a one-person commission and indicated that he would move forward with new regulations.
The CFTC is pursuing a preliminary rule process for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson and Craig plan to send a letter to the White House, encouraging prompt filling of commissioner positions with nominees from both parties.