The US Commodity Futures Trading Commission (CFTC) is leveraging artificial intelligence (AI) and automation to cope with significant new regulatory responsibilities, according to Chairman Mike Selig's testimony before Congress. Despite a substantial decline in the agency's workforce under the Trump administration, with about a quarter of staff leaving since 2025, the CFTC is tasked with overseeing the rapidly growing cryptocurrency and prediction markets. Selig emphasized the importance of AI tools, such as Microsoft's Copilot, in enhancing productivity and facilitating investigations. When questioned about staff reductions, Selig asserted that the agency is operating more efficiently and effectively.
The CFTC is currently handling numerous investigations into prediction markets, where insider trading and market manipulation have been concerns. Selig confirmed that the agency has a zero-tolerance policy for illicit activities and is actively reviewing contracts to prevent such behavior. However, some lawmakers expressed concerns that the agency's workforce is stretched too thin, particularly given its role as the primary regulator of two of the fastest-growing and most volatile markets.
The CFTC is pursuing preliminary rulemaking to establish guidelines for the US prediction markets and is also advancing policy initiatives in the crypto space. The agency's budget request for the next year includes a modest increase in enforcement staff, but some argue that more significant resources are needed to effectively regulate these emerging markets.