The US Commodity Futures Trading Commission is embracing artificial intelligence and automation as it tackles massive new oversight responsibilities, according to congressional testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to demands for federal workforce cuts. However, the CFTC is also being tasked with regulating emerging and rapidly expanding areas such as cryptocurrency and prediction markets.
Selig stated that AI tools will be instrumental in surveilling and conducting investigations, and the agency is incorporating them into various workflows. He cited 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 has a lot on its plate 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 next year only includes three additional enforcement staff, which would still be about 23% short of the 140 personnel the division had in 2025. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would position the CFTC as a central authority over non-securities crypto trading, encompassing transactions in leading assets like bitcoin and Ethereum's ether. The agency is also claiming a dominant legal jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in a year.
Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency would require 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 markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insight. Selig acknowledged 'numerous investigations ongoing' in prediction markets but did not 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. The chairman noted that the agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity.
Representative Angie Craig argued that the agency's workforce is stretched too thin, particularly given its role as the primary regulator of two rapidly growing and volatile markets. She emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The personnel declines at the regulator 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 cannot slow down rulemaking for the sake of the American people. The CFTC is 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 prompt filling of commissioner positions with CFTC nominees from both parties.