The US 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 significant decline in the agency's workforce under President Donald Trump's administration. About a quarter of the CFTC's staff has departed since 2025, due to Trump's federal workforce reduction demands. However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations.
When questioned about the staff reductions, Selig stated that the agency is operating more efficiently and effectively. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, requested assurance that Selig would seek help if the need for additional qualified staff arises. Selig confirmed that proper market enforcement is a top priority, although the CFTC's budget request for the next year includes only three additional enforcement staff, which is still 23% short of the 140 staff members in 2025.
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 in assets like bitcoin and Ethereum's ether. The agency is also asserting its jurisdiction over prediction markets, such as Polymarket and Kalshi, which have grown from millions to billions of dollars in a year.
Selig's predecessor, Rostin Behnam, had argued that the agency needed 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 prediction markets but did not provide further details. He emphasized 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.
Selig stated that the agency has a zero-tolerance policy for illicit market activity and will take 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 the rapidly growing and volatile crypto and prediction markets.
Craig emphasized the need to provide the CFTC with 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 has been left with only 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, including a preliminary rule process for US prediction markets. Thompson and Craig plan to send a letter to the White House, urging them to fill the vacant commissioner positions with CFTC nominees from both parties.