The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with significant new regulatory responsibilities, according to testimony by Chairman Mike Selig, despite a substantial decline in the agency's workforce under the Trump administration. About a quarter of the CFTC's staff has departed since 2025, due to President Trump's demands for federal workforce reductions. However, the agency is also being tasked with overseeing burgeoning areas such as cryptocurrency and prediction markets. Selig informed lawmakers that 'AI tools will be highly beneficial in surveillance and investigations, and we are integrating them into our 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 noted that the CFTC is being assigned a substantial workload with digital assets and prediction markets, and sought assurance that Selig would request assistance if the need for additional qualified staff arises. Selig responded affirmatively. He emphasized that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year includes only three additional enforcement staff, leaving the division about 23% short of its 2025 personnel levels.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would elevate the CFTC's role in non-securities crypto trading, encompassing 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 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, 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 declined to provide specifics.
He stated that regulated platforms are the primary line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. 'We regularly reject contracts and are actively reviewing the markets,' Selig said, emphasizing the agency's 'zero tolerance' policy for illicit activities.
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 personnel decline at the regulator includes 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. '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 for US prediction markets, and Selig has also initiated 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 CFTC nominees from both parties.