The US Commodity Futures Trading Commission is turning to artificial intelligence and automation to cope with its increased regulatory responsibilities, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. With about a quarter of the CFTC's staff having left since 2025, the agency is facing new challenges in overseeing the rapidly growing cryptocurrency and prediction markets. Selig emphasized the importance of AI in enhancing surveillance and investigations, stating that 'tools like AI will be very helpful in surveilling and bringing investigations, and we're incorporating that into various workflows.' When questioned about the staff reductions, Selig asserted that the agency is 'running more efficiently and effectively.' The House Agriculture Committee Chairman, Glenn 'GT' Thompson, expressed concern about the agency's capacity to handle its expanded responsibilities, particularly in the areas of 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 the US prediction markets, and Selig has also initiated policy initiatives in the crypto sector.
The agency's budget request for the next year includes a proposal for only three additional enforcement staff, which would still leave the division about 23% short of its 2025 levels. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would elevate the CFTC's role in regulating non-securities crypto trading, including transactions involving leading 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 significant growth in recent years. Selig's predecessor, former Chairman Rostin Behnam, had previously argued that the agency would require more personnel to effectively oversee the crypto market. 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 investigations ongoing' in the prediction markets but declined to provide further details. He emphasized the importance of regulated platforms as the first line of defense against illicit activities, while the CFTC serves as a second line of defense.
Selig stated that the agency has a 'zero tolerance' policy for market manipulation and insider trading, warning that those engaging in such behavior would face the full force of the law. However, 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 of the fastest-growing and most volatile markets.
Craig emphasized the need to provide the CFTC with sufficient 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 his plans to proceed with major rules as a one-person commission, and he indicated that he would move forward with new regulations. The committee plans to send a letter to the White House to encourage the prompt filling of the vacant commissioner positions with nominees from both parties.