The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with substantial new oversight responsibilities, as stated by Chairman Mike Selig in his congressional testimony. This move comes as the agency faces a significant decline in its workforce under the Trump administration. Approximately a quarter of the CFTC's staff has left since 2025, due to President Trump's demands for a reduced federal workforce. However, the CFTC is also being tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig emphasized that AI tools will be instrumental in surveilling and investigating these markets, and the agency is incorporating them into its workflows. He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about the staff declines, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concern about the agency's workload, particularly with the introduction of 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 is prioritizing the enforcement of these markets, although its budget request for the upcoming year only includes three additional enforcement staff members. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading. The agency is also claiming jurisdiction over prediction markets, which have grown significantly in recent years.
Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to oversee crypto and 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 chairman acknowledged numerous ongoing investigations in these markets but did not provide further details.
He emphasized that regulated platforms are the first line of defense against illicit activities, while the CFTC serves as a second line of defense. Selig noted that the agency has a zero-tolerance policy for market manipulation and insider trading.
However, Representative Angie Craig argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two rapidly growing and volatile markets. She emphasized the need for the CFTC to receive adequate staff, funding, and statutory authority to perform its duties effectively. The personnel declines at the regulator include the commission itself, which is supposed to have five members but currently only has Selig. The chairman was questioned about proceeding with major rules as a one-person commission and stated that he will move forward with new regulations.
The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also initiated policy initiatives in crypto. Committee Chairman 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.