The U.S. Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its growing oversight responsibilities, according to Chairman Mike Selig's congressional testimony. This comes as the agency faces a significant decline in its workforce, with about a quarter of its staff leaving since 2025. Despite this, the CFTC is tasked with regulating the rapidly expanding cryptocurrency and prediction markets.

Selig emphasized that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations. When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively. The committee chairman, Glenn 'GT' Thompson, expressed concerns about the agency's ability to handle its new responsibilities, particularly with regards to digital assets and prediction markets.

Selig assured the committee that he would request additional support if needed. The CFTC is currently pursuing a preliminary rule process to establish guidelines for U.S.

prediction markets, and Selig has also initiated policy initiatives in the crypto space. The agency's budget request for the upcoming year includes a request for only three additional enforcement staff, which has raised concerns about the agency's ability to effectively regulate the markets.

The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of regulating non-securities crypto trading. Selig acknowledged that there are numerous ongoing investigations 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 committee's top Democrat, 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. Craig emphasized the need for the CFTC to receive adequate staff, funding, and statutory authority to effectively perform its duties.