CFTC Chairman Says AI Is Compensating for 25% Staff Cuts at Crypto Regulator

CFTC AI news came directly from Capitol Hill Thursday as Chairman Mike Selig told the House Agriculture Committee that artificial intelligence tools, specifically Microsoft’s Copilot, are filling surveillance and investigation gaps at an agency that has lost roughly 25% of its workforce since 2025, even as Congress prepares to hand it primary oversight of the US crypto market.

CFTC AI news emerged from Thursday’s House Agriculture Committee oversight hearing as Chairman Mike Selig defended his agency’s shrinking headcount by pointing to productivity gains from AI tools, even as lawmakers pressed him on whether the CFTC has the resources to oversee both a rapidly growing crypto market and a prediction market sector that has ballooned into the billions of dollars in annual volume.

The agency has lost approximately 25% of its staff since 2025 under President Trump’s federal workforce reduction drive. Enforcement division staffing, at roughly 108 positions after a recent budget request for three new hires, is still 23% below the 140 enforcement employees on record in 2025. The CFTC currently operates with Selig as the sole sitting commissioner, with four of five legally required positions unfilled including both minority-party seats.

“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 told lawmakers. He specifically cited Microsoft’s Copilot as one productivity tool woven into agency workflows. When asked directly about the staff declines, Selig replied: “We are running more efficiently and effectively.”

The CFTC is simultaneously pursuing two expansions that would dramatically increase its regulatory footprint. First, the CLARITY Act, which is moving toward a Senate Banking Committee markup in late April, would designate the CFTC as the primary regulator of non-securities crypto trading, giving it oversight of Bitcoin, Ethereum, and every digital commodity that doesn’t meet the SEC’s securities definition. Second, the CFTC is asserting exclusive federal jurisdiction over prediction markets, a claim currently being contested in courts by multiple states.

Committee Chairman Glenn “GT” Thompson noted the contradiction. “We’re putting a lot on your plate with digital assets, and we’re obviously going down this path with prediction markets,” he told Selig, then asked him to request more staff if operational needs required it. Selig said “Absolutely” and reiterated that enforcement remains a “top priority.”

Prediction Market Investigations and Insider Trading

The prediction market scrutiny has been intense. Multiple members questioned Selig about trades on Polymarket, Kalshi, and other platforms in which small numbers of anonymous accounts appear to have made significant profits on bets tied to US military actions and government announcements, suggesting potential access to non-public information. Reports have identified roughly six Polymarket accounts that earned $1.2 million on correct bets about US Iran strikes placed hours before the February 28 action became public.

Selig said the agency has “numerous investigations ongoing” in prediction markets but declined to quantify or describe them, saying doing so could compromise active work. He described the regulated platforms as the “first line of defense” before the CFTC acts.

Ranking Member Angie Craig of Minnesota said flatly that the CFTC “cannot adequately oversee digital commodity trading and prediction markets” with current resources. She and Thompson announced plans to write to the White House urging bipartisan commissioner nominations. The single-commissioner structure has broader implications for the CLARITY Act rulemaking process: Selig indicated he would not wait for a full commission. “We cannot for the sake of the American people slow down our rulemaking,” he said, signaling he would advance major regulations alone if necessary, a position that could invite legal challenges to any rules adopted without bipartisan deliberation.

As the CFTC’s crypto role expands, Selig’s claim that AI can offset a quarter of the workforce will face a direct test once the CLARITY Act passes and the full weight of digital asset oversight lands on an agency that, by its own data, has 23% fewer enforcement officers than it needs.