The US Commodity Futures Trading Commission is increasingly relying on artificial intelligence and automation to manage its growing oversight duties, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Since 2025, approximately a quarter of the CFTC's staff has departed, largely due to President Trump's demands for a reduced federal workforce. However, the CFTC is now responsible for regulating the rapidly expanding cryptocurrency and prediction markets.
Selig informed lawmakers that 'AI tools will be instrumental 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 stated that the agency is 'operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC has a lot on its plate with digital assets and prediction markets, and he sought assurance from Selig that he would request help if the need for additional qualified staff arises. 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 upcoming year includes only three additional enforcement staff, which would still be about 23% short of the 140 staff members the division had in 2025. The proposed Digital Asset Market Clarity Act would elevate the CFTC's role in overseeing non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum.
The agency is also asserting its jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced 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 insight.
Selig acknowledged 'numerous ongoing investigations' in the prediction markets but did not provide further details. 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. The chairman noted that the agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity.
Representative Angie Craig 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 personnel decline at the regulator includes 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 would move forward with new regulations, citing the need to not slow down the rulemaking process. The CFTC is pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig would be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.