The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanding oversight duties, as stated by Chairman Mike Selig in his congressional testimony. This move comes as the agency's workforce has decreased substantially under President Donald Trump's administration, with about a quarter of the staff departing since 2025. The CFTC is now tasked with regulating the rapidly growing areas of cryptocurrency and prediction markets. Selig noted that 'tools like AI will be highly beneficial in surveillance and investigations, and we are integrating them into our workflows.' He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about the staff reductions, Selig asserted that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson expressed concern about the added responsibilities, stating 'we're putting a lot on your plate with digital assets, and we're obviously proceeding with prediction markets.' He requested assurance from Selig that he would seek help if the need for additional qualified staff arises. Selig confirmed that proper enforcement of the markets is a top priority, despite the CFTC's budget request for the upcoming year only asking for three more enforcement staff, which would still be about 23% short of the 140 personnel the division had in 2025.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of non-securities crypto trading, including transactions in leading 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 seen significant growth from millions to billions of dollars. 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 markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights. Selig acknowledged 'numerous ongoing investigations' in prediction markets but did not provide further details.
He emphasized 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 stated, 'and we're actively reviewing the markets.' He added that the agency has a 'zero-tolerance policy' for illicit market activity, warning that those who engage in such behavior will face the full force of the law.
However, Representative Angie Craig argued that the agency's workforce is 'stretched too thin,' particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said.
The personnel decline at the regulator includes the commission itself, which is supposed to have five members but has been left with only Selig. He was questioned about proceeding with major rules as a one-person commission and stated that 'we cannot slow down our rulemaking 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 pushed policy initiatives in crypto. Committee Chairman Thompson announced that he and Craig will be sending a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.