The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to tackle its expanding regulatory duties, according to testimony from Chairman Mike Selig, despite a substantial decline in the agency's workforce under the Trump administration. Since 2025, about a quarter of the CFTC's staff has departed, due to President Trump's directives to reduce the federal workforce.
However, the CFTC is also being tasked with overseeing the rapidly growing cryptocurrency and prediction markets. Selig noted that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigations, allowing the agency to operate more efficiently.
When questioned about staffing declines, Selig asserted that the CFTC is 'running more efficiently and effectively.' Chairman Glenn 'GT' Thompson expressed concerns about the agency's capacity to handle its new responsibilities, particularly with regards to digital assets and prediction markets. Selig assured him that if the need for additional staff arises, he will request assistance from the committee. The CFTC is currently pursuing a preliminary rule process to establish guidelines for US prediction markets, and Selig has also initiated policy initiatives in the crypto space. The agency's budget request for the upcoming year includes a modest increase in enforcement staff, from 105 to 108 people, which is still short of the 140 personnel the division had in 2025.
The Digital Asset Market Clarity Act, currently being worked on by the Senate, would grant the CFTC a central role in regulating non-securities crypto trading, including transactions involving major 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, Rostin Behnam, had consistently argued that the agency required more resources to effectively oversee the crypto and 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 investigations' into prediction markets but declined to provide further details. He emphasized the importance of regulated platforms in preventing insider trading, fraud, and market manipulation, while the CFTC serves as a secondary line of defense. Representative Angie Craig expressed concerns 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 perform its duties effectively.
The personnel declines at the regulator include the commission itself, which is supposed to have five members but has been left with only Selig. The chairman was questioned about the impact of this on the agency's rulemaking process, and he indicated that he would proceed with new regulations despite the commission's current composition.
Thompson and Craig plan to send a letter to the White House, urging them to fill the vacant commissioner positions with nominees from both parties.