The US Commodity Futures Trading Commission is embracing artificial intelligence to cope with significant staffing reductions while taking on substantial new responsibilities in overseeing cryptocurrency and prediction markets, according to testimony from Chairman Mike Selig. Despite a decline of about a quarter of the CFTC's workforce since 2025 due to President Donald Trump's demands for federal workforce cuts, the agency is tasked with regulating rapidly growing areas such as cryptocurrency and prediction markets. Selig emphasized that AI tools will be instrumental in surveillance and investigations, pointing to the use of Microsoft's Copilot AI as a productivity aid. When questioned about staff declines, Selig stated that the agency is operating more efficiently and effectively.
Committee Chairman Glenn 'GT' Thompson expressed concerns about the agency's capacity to handle its expanded role, particularly in digital assets and prediction markets, and sought assurance that Selig would request additional qualified staff if needed. Selig confirmed that proper market enforcement is a top priority, although the CFTC's budget request for the next year includes only a minor increase in enforcement staff. The Digital Asset Market Clarity Act, currently under consideration in the Senate, would place the CFTC at the forefront of regulating non-securities crypto trading, including transactions involving major assets like bitcoin and Ethereum. The agency is also asserting its jurisdiction over prediction markets, which have grown significantly and are now subject to accusations of insider trading.
Selig acknowledged numerous ongoing investigations in prediction markets but declined to provide specifics. He emphasized the importance of regulated platforms as the first line of defense against illicit activities and the CFTC's role as a second line of defense, with 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 in regulating rapidly growing and volatile markets, and urged that the CFTC be provided with adequate staff, funding, and statutory authority to fulfill its responsibilities.
The White House has been criticized for leaving the commission with only one member, Chairman Selig, despite the law requiring five members, including two from the minority party. Selig was questioned about proceeding with major rules as a one-person commission and indicated that he would move forward with new regulations, including a preliminary rule process for US prediction markets and policy initiatives in crypto. Committee leaders plan to send a letter to the White House encouraging the prompt filling of commissioner positions with nominees from both parties.