The US Commodity Futures Trading Commission is increasingly relying on artificial intelligence and automation to fulfill its expanded oversight duties, according to testimony from Chairman Mike Selig, 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 significant reductions in the federal workforce, as per agency records. However, the CFTC is also being tasked with regulating the rapidly expanding areas of cryptocurrency and prediction markets.
Selig stated 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 productivity aid. When questioned about the staff reductions at his agency, Selig asserted, 'we are operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted, 'we are placing a substantial burden on you with digital assets, and we are clearly proceeding down this path with prediction markets,' and sought assurance from Selig that he would request assistance from the panel if the need for additional qualified staff arose. Selig responded, 'absolutely.' He emphasized that proper enforcement of the markets is a 'top priority,' although the CFTC's budget request for the upcoming year only asked 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 Digital Asset Market Clarity Act, currently being worked on by the Senate, would elevate the CFTC to a central role in overseeing non-securities crypto trading, including 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 the past year. Selig's predecessor, former Chairman Rostin Behnam, had frequently argued that the agency would require more personnel to oversee crypto and lacked the resources to police the world as prediction markets expanded. During Selig's tenure, the prediction markets have been embroiled in accusations of insider trading, with some cases being addressed by the firms themselves.
However, these markets have drawn intense 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 quantify or discuss their focus. He stated that regulated platforms serve as the first line of defense against insider trading, fraud, and market manipulation in the hundreds of new markets that emerge daily, while the CFTC acts as a second line of defense. 'We regularly reject contracts,' Selig noted, 'and we are actively reviewing the existing markets,' adding that his agency has a 'zero tolerance' policy for illicit market activity.
'Anyone engaging in such behavior will face the full force of the law,' he said. However, Representative Angie Craig, the committee's top Democrat, argued that 'the agency's workforce is stretched too thin,' particularly considering 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 clear 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, including two commissioners from the minority party, but has been left with only Selig by the White House.
The chairman was questioned repeatedly about this during the Thursday 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 alone on new regulations. 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 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.