The U.S. Commodity Futures Trading Commission is leaning toward artificial intelligence and automation as it faces massive new oversight responsibilities, according to congressional testimony from Chairman Mike Selig, even as his agency’s workforce has shrunk significantly under President Donald Trump’s administration.
About a quarter of the CFTC’s staff has gone since 2025 under Trump’s call for the federal workforce to be cut significantly, according to agency records. But the CFTC is also being called upon to regulate new and rapidly growing arenas of cryptocurrency and the prediction markets.
“Tools such as artificial intelligence are going to be very helpful in monitoring and bringing the investigations, and we’re incorporating that into different workflows,” Selig told lawmakers on the House Agriculture Committee at a Thursday hearing. When asked about the staff reduction at his agency, Selig said, “we’re running more efficiently and effectively.”
“We’re putting a lot on your plate with digital assets, and we’re obviously going down this path with prediction markets,” noted committee chairman Glenn “GT” Thompson. He sought an assurance from the CFTC chief that if he finds himself “in a situation where you know the need for additional qualified personnel arises,” he will ask the panel for help.
“Absolutely,” Selig replied.
He claimed that proper enforcement of the markets is a “top priority” for him, even though the CFTC budget request for next year called for just three more enforcement staff to make 108 people — still about 23% shy of the 140 the division had by 2025.
The Digital Asset Market Clarity Act, which the Senate continues to work on, would elevate the CFTC to a central role in non-securities crypto trading, which would include transactions in leading assets such as bitcoin and Ethereum’s ether (ETH). The agency also claims dominant legal jurisdiction over prediction markets, such as at leading firms Polymarket and Kalshi, which are moving from levels measured in the millions of dollars a year ago to multi-billion now.
Selig’s Democratic predecessor, former chairman Rostin Behnam, had routinely argued that the agency would need more people to monitor crypto and didn’t have the resources to monitor the world as prediction markets spread in depth and in a virtually unlimited breadth of contract subjects. During Selig’s short tenure, the prediction markets have erupted in allegations of insider trading, a few of which have been addressed by the firms themselves. But markets have drawn heavy scrutiny of certain trades surrounding U.S. military actions and government statements suggesting a small number of anonymous traders made significant money on correct bets, suggesting the potential for insider trading by people with government insights.
The chairman acknowledged “a lot of research going on” into prediction markets, though he would not quantify a number or discuss their focus. He said the regulated platforms are the first line of defense against insider trading, fraud and market manipulation in the hundreds of new markets (binary event issues) that appear every day on the platforms, while the CFTC itself is a second line of defense.
“We regularly turn down contracts,” Selig noted. “We’re actively reviewing what’s out there,” he said, adding that his agency has a “zero tolerance” policy toward illegal market activity.
“Anyone who engages in that behavior will face the full force of the law,” he said.
But Representative Angie Craig, the committee’s top Democrat, argued that “the agency’s workforce is stretched too thin,” especially given the agency’s role as “the primary regulator of two of the fastest-growing and most volatile markets.”
“We must give the CFTC the staffing, funding and clear statutory authority it needs to do its job,” Craig said.
The staff cuts at the watchdog include the commission itself, which by law is supposed to have five members — including two commissioners from the minority party — but has been left by the White House as a lone secondment by Selig. The chairman was asked repeatedly about that during Thursday’s oversight hearing, including whether he would continue with major rules as a one-man commission.
“We cannot for the sake of the American people slow down our rulemaking,” he said, suggesting he would go it alone on new rules. The CFTC is pursuing an interim rulemaking process to set up guardrails for US prediction markets, and Selig has also pushed policy initiatives in crypto.
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