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, as per agency records. However, the CFTC is also tasked with regulating emerging and rapidly expanding areas such as cryptocurrency and prediction markets.
Selig informed lawmakers 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 staff declines, Selig stated, 'we are operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted, 'we're placing a significant burden on you with digital assets, and we're clearly moving forward with prediction markets,' seeking assurance that Selig would request assistance if the need for additional qualified staff arose. Selig responded, 'absolutely.' He emphasized that proper market enforcement is a 'top priority,' although the CFTC's budget request for the upcoming year only asks for three additional enforcement staff, bringing the total to 108 people, which is still about 23% shy of the 140 staff members in 2025. The proposed Digital Asset Market Clarity Act 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 grown from millions to billions of dollars in a year. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to oversee crypto and lacked resources to police the expanding prediction markets. During Selig's tenure, prediction markets have faced accusations of insider trading, with some cases addressed by the firms themselves. The chairman acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide specifics.
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. 'We regularly reject contracts,' Selig said, adding that his agency has a 'zero tolerance' policy for illicit market activity.
Representative Angie Craig argued that 'the agency's workforce is overstretched,' particularly considering its role as the primary regulator of two rapidly growing and volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said. The personnel decline includes the commission itself, which is supposed to have five members but has been left with only Selig by the White House. The chairman was questioned about proceeding with major rules as a one-person commission.
'We cannot slow down our rulemaking for the sake of the American people,' he said, indicating his intention to move forward with 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 announced that he and Craig will send a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.