The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to cope with 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, due to President Trump's demands for federal workforce reductions. However, the CFTC is also being tasked with regulating emerging and rapidly expanding cryptocurrency and prediction markets.
Selig emphasized that AI tools will be instrumental in surveillance and investigations, 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. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, noted that the CFTC is being assigned a heavy workload with digital assets and prediction markets, and sought assurance that Selig would request assistance 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 next year only includes three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels. The Digital Asset Market Clarity Act, currently being considered by the Senate, would elevate the CFTC's role in non-securities crypto trading, including transactions in prominent assets like bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced rapid growth from millions to billions of dollars.
Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to effectively 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 markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting 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 are the primary defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary 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 engaging in such behavior. However, Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. Craig emphasized the need to provide the CFTC with sufficient 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 indicated that he would move forward with new regulations.
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 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.