The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to tackle its expanded oversight duties, as stated by Chairman Mike Selig in his congressional testimony. Despite a substantial decline in the agency's workforce under the Trump administration, the CFTC is tasked with regulating the rapidly growing cryptocurrency and prediction markets. 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 agency is also being called upon to oversee new and rapidly expanding areas of cryptocurrency and prediction markets.
Chairman Selig emphasized the importance of AI in surveilling and conducting investigations, citing the widespread use of Microsoft's Copilot AI tool as a key productivity aid. When questioned about the staff decline, Selig asserted that the agency is operating more efficiently and effectively. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, expressed concerns about the CFTC's capacity to handle its increasing responsibilities, particularly with regards to digital assets and prediction markets.
Selig assured the committee that he would request assistance if the need for additional qualified staff arises. The CFTC chief emphasized that proper market enforcement 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 about 23% short of its 2025 staffing level. 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 consistently argued that the agency required more personnel to effectively oversee 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 markets have drawn scrutiny over certain trades related to US military actions and government statements, suggesting potential insider trading by individuals with government insights. Chairman Selig acknowledged that numerous investigations are ongoing in the prediction markets, although he declined to provide specifics. He emphasized that regulated platforms are the first line of defense against insider trading, fraud, and market manipulation, while the CFTC serves as a second line of defense.
The chairman noted that the agency regularly rejects contracts and is actively reviewing the markets, with a 'zero tolerance' policy for illicit activities. 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 effectively. The personnel decline at the regulator includes the commission itself, which is supposed to have five members but has been left with only Chairman Selig.
The chairman was questioned about proceeding with major rules as a one-person commission and stated that he would move forward with new regulations, citing the need to protect the American people. The CFTC is currently pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also initiated policy initiatives in the crypto space.
Chairman Thompson announced that he and Craig would be sending a letter to the White House, encouraging them to fill the vacant commissioner positions with CFTC nominees from both parties.