The U.S. Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with substantial new regulatory duties, 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 a reduced federal workforce, as per agency records.
However, the CFTC is also tasked with regulating the rapidly expanding arenas of cryptocurrency and prediction markets. Selig stated that AI tools will be instrumental in surveillance and investigations, and the agency is incorporating them into various 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 given a substantial workload with digital assets and prediction markets, and he sought assurance that Selig would request help 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 next year only asks for three more enforcement staff, which would still be about 23% shy of the 140 personnel the division had in 2025. The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC in a central role over non-securities crypto trading, including transactions in leading assets like bitcoin and Ethereum's ether. The agency is also claiming a dominant legal jurisdiction 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, 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 been embroiled in accusations of insider trading, with some cases being addressed by the firms themselves. However, certain trades around U.S. military actions and government statements have drawn scrutiny, suggesting potential insider trading by individuals with government insight.
Selig acknowledged numerous ongoing investigations in prediction markets but declined to quantify or discuss their focus. 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. The chairman noted that his agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activity. 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.
Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The personnel declines at the regulator 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 that he cannot slow down the rulemaking process for the sake of the American people. The CFTC is pursuing a preliminary rule process to establish guardrails for U.S. prediction markets, and Selig has also pushed policy initiatives in crypto. Committee Chairman Thompson announced that he and Craig will be sending a letter to the White House to encourage them to promptly fill the commissioner positions with CFTC nominees from both parties.