The U.S. Commodity Futures Trading Commission is leveraging artificial intelligence and automation to address substantial new regulatory responsibilities, according to Chairman Mike Selig's testimony, despite a significant decline in the agency's workforce under the Trump administration.
Approximately a quarter of the CFTC's staff has departed since 2025, due to demands for federal workforce reductions. However, the CFTC is also tasked with overseeing the rapidly expanding cryptocurrency and prediction markets.
Selig emphasized the utility of AI tools, such as Microsoft's Copilot, in enhancing surveillance and investigative capabilities. When questioned about staffing declines, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, requested assurance that Selig would seek additional qualified staff if needed, to which Selig agreed.
Selig prioritized market enforcement, although the CFTC's budget request for the upcoming year only includes three additional enforcement staff, leaving the division about 23% short of its 2025 personnel level. The proposed Digital Asset Market Clarity Act would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving prominent assets like bitcoin and Ethereum. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced rapid growth.
Selig's predecessor, 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 multiple ongoing investigations in the prediction markets but declined to provide specifics.
He emphasized the regulated platforms' role as the primary line of defense against illicit activities, with the CFTC serving as a secondary line of defense. Selig stated that his agency has a 'zero tolerance' policy for market manipulation and insider trading. 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 advocated for providing the CFTC with sufficient staff, funding, and statutory authority to perform its duties effectively.
The White House has left the commission with a single member, Selig, despite the law requiring a five-member commission. Selig 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 for U.S.
prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced plans to send a letter to the White House, along with Craig, to encourage the prompt filling of commissioner positions with nominees from both parties.