The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle significant new regulatory responsibilities, according to Chairman Mike Selig's 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, amid Trump's push for federal workforce reductions, as documented in agency records.
However, the CFTC is also tasked with regulating the rapidly expanding cryptocurrency and prediction markets. Selig informed lawmakers on the House Agriculture Committee that 'tools like AI will be instrumental in surveillance and investigations, and we're integrating them into our workflows,' citing the widespread adoption of Microsoft's Copilot AI tool as a productivity aid.
When questioned about staffing 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, seeking assurance that Selig would request assistance if the need for additional qualified staff arose. Selig confirmed this, stating that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year includes only three additional enforcement staff, bringing the total to 108 - still 23% short of the 140 personnel in 2025. The proposed Digital Asset Market Clarity Act would elevate the CFTC's role in non-securities crypto trading, encompassing transactions in leading assets like bitcoin and Ethereum's ether. The agency is also asserting dominance over prediction markets, including 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, prediction markets have faced accusations of insider trading, with some cases 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 emphasized 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 actively review the markets,' Selig said, adding that the agency has a 'zero tolerance' policy for illicit 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 personnel decline 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 that he will move forward with new regulations. The CFTC is pursuing a preliminary rulemaking process to establish guidelines for US prediction markets, and Selig has also promoted policy initiatives in crypto.
Thompson stated that he and Craig will send a letter to the White House to 'encourage them to promptly fill the commissioner positions' with CFTC nominees from both parties.