The US Commodity Futures Trading Commission is embracing artificial intelligence and automation to cope with substantial new regulatory duties, according to Chairman Mike Selig's congressional testimony, despite a significant decline in the agency's workforce under President Donald Trump's administration. Since 2025, approximately a quarter of the CFTC's staff has departed, in line with Trump's demands for federal workforce reductions. However, the CFTC is also tasked with overseeing the rapidly expanding cryptocurrency and prediction markets. Selig emphasized that AI tools, such as Microsoft's Copilot, are being utilized to enhance surveillance and investigation capabilities, allowing the agency to operate more efficiently.
When questioned about staffing declines, Selig asserted that the CFTC is 'running more efficiently and effectively.' The House Agriculture Committee Chairman, Glenn 'GT' Thompson, noted that the agency is being entrusted with significant responsibilities, including digital assets and prediction markets, and sought assurance that Selig would request additional qualified staff if needed. Selig confirmed that he would do so.
He also stated that proper market enforcement is a top priority, although the CFTC's budget request for the upcoming year includes only 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 regulating non-securities crypto trading, including transactions involving leading assets like bitcoin and Ethereum. The agency is also asserting its 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 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 ongoing investigations' in prediction markets but did not 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 noted that his agency regularly rejects contracts and is actively reviewing market activity, with a 'zero tolerance' policy for illicit 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 perform its duties effectively. The regulator's personnel declines include the commission itself, which is supposed to have five members but currently consists of 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 pursuing a preliminary rule process to establish guardrails for US prediction markets, and Selig has also promoted policy initiatives in crypto. Thompson announced that he and Craig would be sending a letter to the White House to encourage the prompt filling of commissioner positions with CFTC nominees from both parties.