The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its growing oversight duties, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Since 2025, about a quarter of the CFTC's staff has departed, due to President Trump's demands for a reduced federal workforce. However, the CFTC is now tasked with regulating the rapidly expanding cryptocurrency and prediction markets.
Selig noted that 'AI tools will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows.' He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid. 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, given its role in overseeing digital assets and prediction markets. Selig assured him that if the need for additional qualified staff arises, he will request assistance from the panel.
The CFTC chief emphasized that proper market enforcement is a top priority, although the agency's budget request for the next year includes only three additional enforcement staff, leaving the division about 23% short of its 2025 levels. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of non-securities crypto trading regulation, covering transactions in prominent 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 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. 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 prediction markets but declined to provide specifics. 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.
The chairman 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. Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is 'stretched too thin,' given its role as the primary regulator of two of the fastest-growing and most volatile markets. Craig stressed that the CFTC needs adequate staff, funding, and statutory authority to perform its duties effectively.
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 replied that he cannot slow down the rulemaking process for the sake of the American people. 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. Committee Chairman Thompson announced that he and Craig will send a letter to the White House, urging them to promptly fill the vacant commissioner positions with CFTC nominees from both parties.