The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding oversight duties, as stated by Chairman Mike Selig in his congressional testimony, despite the agency's workforce shrinking substantially under President Donald Trump's administration. Since 2025, approximately a quarter of the CFTC's staff has departed, in line with Trump's demands for significant reductions in the federal workforce, according to agency records. However, the CFTC is also being tasked with regulating the rapidly growing fields of cryptocurrency and prediction markets.
Selig noted that 'tools like AI 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 key productivity aid. When questioned about staff declines, Selig asserted that the agency is 'operating more efficiently and effectively.' Chairman Glenn 'GT' Thompson pointed out that the committee is placing a substantial burden on the CFTC with digital assets and prediction markets, and sought assurance that Selig would request help 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 only asks for three additional enforcement staff, bringing the total to 108 people, which is still about 23% short of the 140 staff members the division had in 2025. The proposed Digital Asset Market Clarity Act would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving major assets like bitcoin and Ethereum's ether. The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in just a year. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee crypto and lacked the resources to police the rapidly 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 raised concerns about potential insider trading by individuals with government insights. Selig acknowledged 'numerous ongoing investigations' in the prediction markets but declined to provide further details. 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.
'We regularly reject contracts and are actively reviewing the markets,' Selig said, adding that the agency has a 'zero tolerance' policy for illicit activities. 'Anyone engaging in such behavior will face the full force of the law,' he warned.
However, Representative Angie Craig argued that the agency's workforce is stretched too thin, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said. The personnel declines at the regulator include the commission itself, which is supposed to have five members but has been left with only Selig by the White House. Selig was questioned repeatedly about this during the oversight hearing, including whether he would proceed with major rules as a one-person commission.
'We cannot slow down 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 currently pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson stated that he and Craig will be sending a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.