The US Commodity Futures Trading Commission is leveraging artificial intelligence and automation to cope with substantial new regulatory responsibilities, as stated by Chairman Mike Selig in his congressional testimony, despite the agency's workforce declining considerably under President Donald Trump's administration. With approximately a quarter of the CFTC's staff leaving since 2025 due to federal workforce reduction demands, the agency is also tasked with overseeing burgeoning cryptocurrency and prediction markets. Selig noted that AI tools will be instrumental in surveillance and investigations, citing the extensive use of Microsoft's Copilot AI as a key productivity aid.
When questioned about staff declines, Selig asserted that the agency is operating more efficiently. The House Agriculture Committee Chairman, Glenn 'GT' Thompson, expressed concern about the agency's capacity to handle its expanded role, particularly in digital assets and prediction markets, and sought assurance that Selig would request additional qualified staff if needed. Selig confirmed that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year only includes three additional enforcement staff, leaving the division about 23% short of its 2025 personnel. The Digital Asset Market Clarity Act, currently under consideration in the Senate, would position the CFTC as a central authority over non-securities crypto trading, encompassing transactions in prominent 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 rapid growth from millions to billions of dollars. Selig's predecessor, Rostin Behnam, had consistently argued that the agency required more personnel to effectively 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 did not provide specifics. 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. The agency has a zero-tolerance policy for illicit market activity, with Selig stating that anyone engaging in such behavior will face the full force of the law.
However, Representative Angie Craig argued that the agency's workforce is overstretched, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets. Craig emphasized the need to provide the CFTC with sufficient staff, 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, including a preliminary rule process for US prediction markets and policy initiatives in crypto. Thompson and Craig plan to send a letter to the White House, urging them to promptly fill the vacant commissioner positions with nominees from both parties.