The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanded oversight duties, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Approximately a quarter of the CFTC's staff has departed since 2025, due to President Trump's demands for a reduced federal workforce. However, the CFTC is also being tasked with regulating the rapidly growing cryptocurrency and prediction markets.
Selig noted that "AI tools will be instrumental in surveillance and investigations, and we are integrating them into our workflows." When questioned about staffing declines, Selig asserted that the agency is operating more efficiently. Committee Chairman Glenn 'GT' Thompson expressed concerns about the CFTC's capacity to handle its new responsibilities, particularly with regards to digital assets and prediction markets.
Selig assured him that if additional qualified staff are needed, he will seek assistance from the committee. The CFTC is prioritizing enforcement, with Selig stating that it is a 'top priority.' The agency's budget request for the next year includes only three additional enforcement staff, which would still leave the division short of its 2025 staffing level.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would place the CFTC at the forefront of regulating non-securities crypto trading, including transactions involving bitcoin and ether. The agency is also claiming jurisdiction over prediction markets, such as those operated by Polymarket and Kalshi, which have experienced significant growth. 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. The chairman acknowledged 'numerous ongoing investigations' in prediction markets but declined to provide further details. 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.
Selig stated that the agency has a 'zero tolerance' policy for illicit market activity and will take action against those who engage in such behavior. 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. Craig emphasized the need to provide the CFTC with sufficient staff, funding, and statutory authority to perform its duties. The regulator's personnel declines include 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 and stated that he will 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 will be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.