The U.S. Commodity Futures Trading Commission is leaning into synthetic intelligence and automation because it faces huge new oversight duties, based on congressional testimony from Chairman Mike Selig, at the same time as his company’s workforce has declined considerably beneath the administration of President Donald Trump.
About 1 / 4 of the CFTC’s workers has left since 2025, beneath Trump’s calls for that the federal workforce be reduce considerably, based on company information. But the CFTC can also be being known as upon to manage new and quickly rising arenas for cryptocurrency and the prediction markets.
“Tools such as AI are going to be very helpful in surveilling and bringing the investigations, and we’re incorporating that into various workflows,” Selig instructed lawmakers of the House Agriculture Committee at a Thursday hearing, citing widespread use of Microsoft’s Copilot AI device as one productiveness assist. When requested concerning the workers declines at his company, Selig stated, “we are 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,” famous 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 staff emerges” that he’ll ask the panel for assist.
“Absolutely,” Selig responded.
He asserted that correct enforcement of the markets is a “top priority” of his, although the CFTC budget request for next year requested for solely three extra enforcement workers to make 108 individuals — nonetheless about 23% shy of the 140 the division had in 2025.
The Digital Asset Market Clarity Act that the Senate continues to work on would elevate the CFTC right into a central position over non-securities crypto buying and selling, which would come with transactions in main property reminiscent of bitcoin and Ethereum’s ether (ETH). The company can also be claiming a dominant legal jurisdiction over the prediction markets reminiscent of at main corporations Polymarket and Kalshi, that are rocketing from ranges measured within the thousands and thousands of {dollars} a yr in the past to multiple billions now.
Selig’s Democratic predecessor, former Chairman Rostin Behnam, had routinely argued that the company would want extra individuals to supervise crypto and did not have the sources to police the world as prediction markets unfold in depth and in a nearly limitless breadth of contract matters. During Selig’s transient tenure, the prediction markets have erupted in accusations of insider buying and selling, a couple of of which have been addressed by the corporations themselves. But the markets have drawn heavy scrutiny on sure trades round U.S. navy actions and authorities statements that counsel small numbers of nameless merchants made vital cash on appropriate bets, suggesting the potential for insider buying and selling from individuals with authorities perception.
The chairman acknowledged “numerous investigations ongoing” in prediction markets, although he would not quantify a quantity or focus on their focus. He stated the regulated platforms are the primary line of protection in opposition to insider buying and selling, fraud and market manipulation within the tons of of latest markets (binary occasion questions) that emerge each day on the platforms, whereas the CFTC itself is a second line of protection.
“We regularly reject contracts,” Selig famous. “We’re actively reviewing what’s out there,” he stated, including that his company has a “zero tolerance” coverage for illicit market exercise.
“Anyone who engages in that behavior will face the full force of the law,” he stated.
But Representative Angie Craig, the committee’s prime Democrat, argued that “the agency’s workforce is stretched too thin,” particularly contemplating the company’s position because the “primary regulator of two of the fastest growing and most volatile markets.”
“We must give the CFTC the staff, the funding and the clear statutory authority it needs to do its job,” Craig stated.
The personnel declines at the regulator contains the fee itself, which is meant to have 5 members beneath the legislation — together with two commissioners from the minority get together — however which has been left by the White House as a solitary posting of Selig. The chairman was questioned repeatedly about that in the course of the Thursday oversight listening to, together with whether or not he’d proceed with main guidelines as a one-person fee.
“We cannot for the sake of the American people slow down our rulemaking,” he stated, suggesting he’ll transfer alone on new rules. The CFTC is pursuing a preliminary rule course of to set up guardrails for U.S. prediction markets, and Selig has additionally pushed policy initiatives in crypto.
Thompson stated he and Craig will probably be sending a letter to the White House to “encourage them to promptly fill those commissioner positions” with CFTC nominees from each events.
Read More: CFTC sues Illinois, Arizona, Connecticut over states’ sports prediction market efforts
UPDATE (April 16, 2022, 18:07 UTC): Adds plan for committee letter to White House on fee vacancies.
