The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with substantial new regulatory 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 also tasked with overseeing burgeoning 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,' referencing the widespread use of Microsoft's Copilot AI tool as a productivity aid.
When questioned about staff declines, Selig stated, 'we are operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson noted that the CFTC is being assigned a substantial role in digital assets and prediction markets, seeking assurance that Selig would request assistance if the need for additional qualified staff arises. Selig confirmed, 'absolutely.' He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year only asks for three additional enforcement staff, leaving the division about 23% short of its 2025 personnel count. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would position the CFTC as a central authority over non-securities crypto trading, including transactions in prominent assets like bitcoin and Ethereum.
The agency is also asserting dominance over prediction markets, such as those operated by Polymarket and Kalshi, which have grown from millions to billions of dollars in a year. Selig's predecessor, 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, prediction markets have faced accusations of insider trading, with some cases being addressed by the firms themselves. However, these markets have drawn intense 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 declined to 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.
'We regularly reject contracts,' Selig noted, 'and we are actively reviewing the markets,' emphasizing the agency's 'zero tolerance' policy for illicit activities. 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. 'We must provide the CFTC with the necessary staff, funding, and statutory authority to perform its duties,' Craig said. The regulator's personnel declines include the commission itself, which is supposed to have five members but has been left with only Selig by the White House.
Selig was questioned about proceeding with major rules as a one-person commission and stated, 'we cannot slow down our rulemaking for the sake of the American people,' indicating he will move forward with new regulations alone if necessary. 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 will send a letter to the White House, urging them to promptly fill the commissioner positions with CFTC nominees from both parties.