The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its increasing regulatory responsibilities, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under President Donald Trump's administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to Trump's demands for a reduced federal workforce. However, the CFTC is also tasked with overseeing the rapidly growing cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in surveillance and investigations, citing the widespread use of Microsoft's Copilot AI tool as a productivity aid.
When questioned about staff reductions, Selig asserted that the agency is operating more efficiently. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, noted that the CFTC is being given a substantial amount of responsibility, particularly with digital assets and prediction markets, and sought assurance that Selig would request assistance if needed. Selig confirmed that he would do so. He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the next year only includes three additional enforcement staff, leaving the division about 23% short of its 2025 level.
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, including transactions involving major assets like bitcoin and Ethereum's ether. 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 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 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. Selig noted that his agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity.
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 rapidly growing and volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The regulator's personnel declines include the commission itself, which is supposed to have five members but has been left with only Selig.
The chairman was questioned about proceeding with major rules as a one-person commission and stated that he cannot slow down the rulemaking process for the sake of the American people. 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 be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.