The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its growing 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 federal workforce reductions.
However, the CFTC is now responsible for regulating the rapidly expanding cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in surveillance and investigations, and the agency is incorporating them into its workflows. He cited the widespread use of Microsoft's Copilot AI tool as a 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 CFTC's ability to handle its new responsibilities, given the staff reductions. Selig assured him that he would request additional support if needed. The CFTC chief emphasized that proper market enforcement is a top priority, although the agency's budget request for the next year includes only three additional enforcement staff, leaving the division about 23% short of its 2025 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 in assets like bitcoin and Ethereum.
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 the past year. Selig's predecessor, Rostin Behnam, had argued that the agency needed more personnel to 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 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 prediction markets but did not 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.
The chairman emphasized that the agency has a 'zero tolerance' policy for illicit market activity and will take action against those who engage in such behavior. 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 stressed the need for the CFTC to receive adequate 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 would move forward with new regulations.
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 will send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.