The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with significant new regulatory responsibilities, according to testimony from Chairman Mike Selig, despite a substantial 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 leaner federal workforce. However, the CFTC is now tasked with overseeing the rapidly expanding cryptocurrency and prediction markets. Selig emphasized that AI tools will be instrumental in monitoring and investigating these markets, citing the widespread adoption of Microsoft's Copilot AI tool as a key productivity aid.
When questioned about the staff reductions, Selig asserted that the agency is operating more efficiently and effectively. Committee Chairman Glenn 'GT' Thompson expressed concerns about the agency's ability to handle its growing workload, particularly with regards to digital assets and prediction markets. Selig assured him that he would request additional support if needed.
The CFTC chief stated that enforcing market regulations is a top priority, although the agency's budget request for the upcoming year only includes three additional enforcement staff, which would still leave the division short of its 2025 staffing levels. The proposed Digital Asset Market Clarity Act would elevate the CFTC's role in regulating non-securities crypto trading, including transactions involving prominent assets like bitcoin and Ethereum. The agency is also asserting its jurisdiction over prediction markets, which have grown exponentially in recent times. Selig acknowledged that numerous investigations are ongoing in these markets, but declined to provide further details.
He emphasized that regulated platforms are the primary line of defense against insider trading and market manipulation, while the CFTC serves as a secondary line of defense. The chairman reiterated the agency's 'zero tolerance' policy towards illicit market activities, warning that those who engage in such behavior will face severe consequences.
However, 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. She advocated for providing the CFTC with the necessary staff, funding, and statutory authority to effectively perform its duties.
The regulator's personnel shortages include the commission itself, which is supposed to have five members but currently only has one, Chairman Selig. He was questioned about the impact of this on the agency's rulemaking process, but indicated that he would proceed with new regulations as needed.
The CFTC is currently pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also launched policy initiatives in the crypto space. Committee Chairman Thompson announced plans to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.