AI Helps CFTC Manage Crypto, Prediction Market Growth

The U.S. Commodity Futures Trading Commission is deploying artificial intelligence tools to compensate for a workforce that has shrunk by roughly 25% since 2025, even as Congress prepares to hand the agency sweeping new authority over crypto markets and a prediction markets sector that has ballooned into the billions of dollars. 

AI and Automation Step in Where Headcount Has Fallen

CFTC Chairman Mike Selig made the case for the agency’s operational readiness before the House Agriculture Committee on Thursday, arguing that technological efficiency can offset the loss of personnel.

Selig pointed specifically to Microsoft’s Copilot as one of the tools being woven into the agency’s enforcement and surveillance workflows. 

“Tools such as AI are going to be very helpful in surveilling and bringing the investigations, and we’re incorporating that into various workflows,” he told lawmakers. 

Despite the departure of approximately a quarter of the agency’s staff following federal workforce reduction efforts under President Donald Trump, Selig maintained that the regulator is operating at an acceptable standard. 

The CFTC’s current budget request seeks funding for just three additional enforcement personnel, which would bring the division to 108 staff, still roughly 23% below the 140 enforcement employees on record in 2025.

Growing Mandate Strains an Already Stretched Agency

The agency’s responsibilities are expanding on two fronts simultaneously. Lawmakers are advancing the Digital Asset Market Clarity Act, legislation that would position the CFTC as the primary regulator of non-securities crypto trading, covering assets including bitcoin and Ethereum’s ether. 

At the same time, the CFTC is asserting jurisdiction over the fast-growing prediction markets space, which includes platforms such as Polymarket and Kalshi. Those markets have scaled from annual volumes in the millions to multiple billions of dollars within a single year, dramatically widening the agency’s oversight obligations. 

House Agriculture Committee Chairman Glenn “GT” Thompson acknowledged the mounting pressure on the regulator directly: 

“We’re putting a lot on your plate with digital assets, and we’re obviously going down this path with prediction markets.”

Selig confirmed that the CFTC has opened “numerous investigations” into prediction market activity but declined to specify targets or scope. He characterized regulated platforms as the first line of defense against fraud, insider trading, and manipulation, with the CFTC functioning as a secondary enforcement layer. 

“We regularly reject contracts. Anyone who engages in that behavior will face the full force of the law.” 

The scrutiny follows allegations that a small number of anonymous traders may have profited from non-public information tied to U.S. military actions and government announcements. Some platforms have attempted to address those concerns internally, though questions remain unresolved

Solo Chairman Presses Ahead With Rulemaking Despite Four Commission Vacancies

Compounding the agency’s resource challenges is a structural problem at its leadership level. The CFTC is statutorily designed to operate with five commissioners representing both parties, but Selig is currently its only sitting member. 

When lawmakers questioned whether he would pause major regulatory actions given the vacancies, Selig was unequivocal: 

“We cannot, for the sake of the American people, slow down our rulemaking.” 

Lawmakers Push for Nominations to Restore Full Commission

The agency is already advancing a preliminary rulemaking framework for U.S. prediction markets alongside broader crypto policy initiatives. In response, Thompson and ranking Democrat Representative Angie Craig announced plans to write to the White House urging bipartisan commissioner nominations to restore full leadership.

Craig had earlier stated that the agency’s workforce is stretched too thin, describing the CFTC as “the primary regulator of two of the fastest growing and most volatile markets” and calling for adequate staff, funding, and statutory authority to match its mandate.