The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding oversight responsibilities, according to Chairman Mike Selig's congressional testimony, despite a substantial decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to President Trump's demands for federal workforce reductions, as per agency records.
However, the CFTC is also tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig emphasized the importance of AI in surveillance and investigations, citing the use of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about staff declines, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concerns about the staff reductions and the agency's ability to handle its growing responsibilities, seeking 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 includes only three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving 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 experienced significant growth. Selig's predecessor, former Chairman Rostin Behnam, had argued that the agency required more personnel to effectively oversee crypto and 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 further details.
He emphasized the importance of regulated platforms as the first line of defense against insider trading, fraud, and market manipulation, with the CFTC serving as a second line of defense. Selig noted that the 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 for the CFTC to receive adequate staff, funding, and statutory authority to perform its duties effectively.
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 proceeding with major rules as a one-person commission and indicated that he would move forward with new regulations.
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 would be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.