The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding oversight responsibilities, according to testimony from Chairman Mike Selig, despite a significant decline in the agency's workforce under the Trump administration. Since 2025, approximately a quarter of the CFTC's staff has departed, due to President Trump's demands for a reduced federal workforce. However, the CFTC is now tasked with regulating the rapidly growing cryptocurrency and prediction markets. Selig noted that AI tools are being utilized to enhance surveillance and investigations, with the agency incorporating Microsoft's Copilot AI into its workflows.
When questioned about staffing declines, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concerns about the CFTC's ability to handle its new responsibilities, given the staff shortages.
Selig assured him that if additional qualified staff were needed, he would request assistance from the panel. The CFTC chief emphasized that enforcing market regulations is a top priority, although the agency's budget request for the upcoming year only includes 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 grant the CFTC a central role in overseeing non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum.
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 effectively oversee crypto 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 investigations ongoing' 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 for the CFTC to receive adequate staffing, funding, and statutory authority to fulfill its responsibilities. 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 indicated that he would move forward with new regulations.
The CFTC is currently pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also pushed policy initiatives in crypto. Committee Chairman Thompson announced plans to send a letter to the White House, encouraging them to fill the vacant commissioner positions with nominees from both parties.