The US Commodity Futures Trading Commission is increasingly relying on artificial intelligence and automation to manage its expanding regulatory responsibilities, according to testimony by Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff have departed since 2025, due to President Trump's demands for substantial reductions in the federal workforce, as per agency records.
However, the CFTC is also being tasked with regulating emerging and rapidly growing areas, including cryptocurrency and prediction markets. Selig noted that AI tools are being utilized to enhance surveillance and investigations, citing the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about staff reductions, Selig emphasized that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concern about the agency's capacity to handle its expanding responsibilities, particularly with regard to digital assets and prediction markets, and sought assurance that Selig would request assistance if needed. Selig confirmed that he would do so, emphasizing that effective market enforcement is a top priority.
The CFTC's budget request for the upcoming year includes a modest increase in enforcement staff, from 105 to 108 personnel, still short of the 140 staff members the division had in 2025. The Digital Asset Market Clarity Act, currently being considered by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving leading assets such as bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, which have experienced rapid growth, with some firms reporting transactions in the billions of dollars. Selig's predecessor, former Chairman Rostin Behnam, had consistently argued that the agency required more personnel to effectively oversee the crypto market 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 due to certain trades related to US military actions and government statements, which suggest the potential for insider trading by individuals with government insight.
Selig acknowledged that numerous investigations are ongoing in the prediction markets but declined to provide further details. He emphasized that regulated platforms are the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense.
The agency is actively reviewing contracts and has a zero-tolerance policy for illicit market activity, with Selig warning that those engaging in such behavior will face the full force of the law. However, Representative Angie Craig, the committee's top Democrat, argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to effectively 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 the impact of this on the agency's rulemaking process, with Selig indicating that he will proceed with major rules despite the commission's current composition. The CFTC is pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. Committee Chairman Thompson announced plans to send a letter to the White House, along with Representative Craig, to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.