The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with significant new regulatory responsibilities, as stated by Chairman Mike Selig in his congressional testimony, despite a substantial 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, according to agency records.
However, the CFTC is also tasked with overseeing rapidly expanding cryptocurrency and prediction markets. Selig noted that 'AI tools will be invaluable in monitoring and conducting investigations, and we are integrating them into our workflows.' He cited the widespread use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about staff declines, Selig stated, 'we are operating more efficiently and effectively.' Committee Chairman Glenn 'GT' Thompson expressed concern about the agency's workload, saying, 'we're placing a lot on your plate with digital assets, and we're obviously proceeding with prediction markets.' He sought assurance from Selig that he would request assistance if the need for additional qualified staff arose.
Selig responded affirmatively. 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, bringing the total to 108 people, which is still 23% below the 140 staff members in 2025. The proposed Digital Asset Market Clarity Act would elevate the CFTC's role in non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum's ether. The agency is also asserting its 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, former Chairman 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, the prediction markets have faced accusations of insider trading, with some cases being addressed by the firms themselves.
However, these markets have drawn scrutiny due to 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, adding that his agency has a 'zero tolerance' policy for illicit market 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.
'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, including two minority party commissioners, but has been left with only Selig by the White House.
The chairman was questioned about proceeding with major rules as a one-person commission. 'We cannot slow down our rulemaking for the sake of the American people,' he said, indicating his intention to 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 send a letter to the White House, urging them to promptly fill the commissioner positions with CFTC nominees from both parties.