The U.S. Commodity Futures Trading Commission is leaning toward artificial intelligence and automation as it faces huge new oversight responsibilities, according to Chairman Mike Selig’s congressional testimony, even as his agency’s workforce has shrunk significantly under President Donald Trump’s administration.
About a quarter of the CFTC staff has left since 2025, under Trump’s demands that the federal workforce be significantly reduced, according to agency records. But the CFTC is also being asked to regulate new and rapidly growing areas for cryptocurrencies and prediction markets.
“Tools like AI are going to be very useful for surveillance and conducting investigations, and we are incorporating them into various workflows,” Selig told lawmakers on the House Agriculture Committee at a hearing Thursday, citing the widespread use of Microsoft’s Copilot AI tool as a productivity aid. When asked about staff reductions at his agency, Selig said, “We are operating more efficiently and effectively.”
“We’re putting a lot on the line with digital assets and we’re obviously going down this path with prediction markets,” said committee chair Glenn “GT” Thompson. He sought assurances from the CFTC chief that if he finds himself “in a situation where he knows the need for additional qualified personnel arises,” he will ask the panel for help.
“Absolutely,” Selig responded.
He said proper markets enforcement is a “top priority” for him, although the CFTC’s budget request for next year called for just three more enforcement officers to make up 108 people, still 23% fewer than the division’s 140 in 2025.
The Digital Asset Market Clarity Act that the Senate continues to work on would elevate the CFTC to a central role in non-securities cryptocurrency trading, which would include transactions in leading assets like bitcoin. and Ethereum ether (ETH). The agency also claims dominant legal jurisdiction over prediction markets, such as leading companies Polymarket and Kalshi, which are soaring from levels measured in millions of dollars a year ago to several billion now.
Selig’s Democratic predecessor, former Chairman Rostin Behnam, had routinely argued that the agency would need more people to oversee cryptocurrencies and did not have the resources to police the world as prediction markets expanded in depth and a virtually limitless breadth of contract issues. During Selig’s brief tenure, prediction markets erupted with allegations of insider trading, some of which have been addressed by the companies themselves. But markets have come under intense scrutiny over certain trades surrounding U.S. military actions and government statements suggesting that a small number of anonymous traders made a lot of money with correct bets, suggesting the potential for insider trading by people with government knowledge.
The president acknowledged that there are “numerous investigations underway” into prediction markets, although he declined to quantify a number or discuss his approach. He said 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 emerge every day on the platforms, while the CFTC itself is a second line of defense.
“We turn down contracts regularly,” Selig said. “We’re actively reviewing what’s out there,” he said, adding that his agency has a “zero tolerance” policy for illicit market activity.
“Anyone who engages in such behavior will face the full force of the law,” he said.
But Rep. Angie Craig, the committee’s top Democrat, argued that “the agency’s workforce is too stretched,” especially considering the agency’s role as “the primary regulator of two of the most volatile and fastest-growing markets.”
“We must give the CFTC the staff, funding and clear legal authority it needs to do its job,” Craig said.
Personnel losses at the regulator include the commission itself, which is supposed to have five members under the law – including two commissioners from the minority party – but which the White House has left as a solitary Selig position. The president was repeatedly questioned about this during Thursday’s oversight hearing, including whether he would proceed with major rules like a one-man commission.
“We cannot, for the sake of the American people, slow down our rulemaking,” he said, suggesting he will act alone on new regulations. The CFTC is conducting a draft rules process to establish guardrails for US prediction markets, and Selig has also pushed policy initiatives in crypto.
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