Key Takeaways:
CFTC Chairman Michael Selig confirmed the company is deploying AI and automation instruments to surveil markets with a 20%-reduced workers since FY2024. Six Polymarket accounts reportedly earned $1.2 million betting on U.S. Iran strikes hours earlier than the February twenty eighth motion, elevating insider buying and selling alarms. Selig known as bipartisan crypto market construction laws below the Readability Act important, urging Congress to ship the invoice to the president’s desk in 2025.
Selig Calls Readability Act Important as CFTC Faces Congressional Warmth Over Polymarket Insider Buying and selling Fears
Chairman Michael Selig, sworn in roughly 100 days earlier than the listening to, testified that the Commodity Futures Buying and selling Fee (CFTC) has licensed the usage of Microsoft 365 Copilot throughout its workforce and is constructing new AI-driven surveillance programs to flag fraud, market manipulation, and insider buying and selling. The company’s headcount has dropped from 708 full-time staff on the finish of fiscal yr 2024 to roughly 543, a discount of greater than 20%. Selig defended the cuts, telling the panel the company is operating extra effectively than ever.
Rating Member Angie Craig of Minnesota pushed again instantly. Craig argued the CFTC can’t adequately oversee digital commodity buying and selling and prediction markets with staffing ranges beneath what the primary Trump administration had itself requested. She known as for the company to be totally funded and mentioned Congress by no means supposed for a single commissioner to run the CFTC alone. Selig is presently the one sitting commissioner, with 4 seats vacant.
A number of members questioned Selig a few sample of well-timed trades on Polymarket, Kalshi, and different platforms tied to delicate authorities actions. Rep. Jim McGovern of Massachusetts cited roughly $500 million in oil and equities futures positioned simply earlier than President Trump posted on Reality Social at 7:04 a.m. on March twenty third that the U.S. had begun ceasefire talks with Iran. Rep. April McClain Delaney and others referenced a Reuters report that six newly created Polymarket accounts earned roughly $1.2 million betting that U.S. airstrikes on Iran would happen, with these accounts funded inside 24 hours of the strikes.
Selig repeated a zero tolerance coverage on insider buying and selling all through the listening to however declined to substantiate or deny whether or not the CFTC is investigating any particular trades, saying doing so might compromise energetic investigations. He mentioned the company’s enforcement division, led by David Miller, a former CIA officer and Southern District of New York prosecutor, is actively staffing up.
On digital property, Selig expressed sturdy help for the CLARITY Act, bipartisan crypto market construction laws this committee has superior. He advised members the invoice is important to finish years of regulatory ambiguity that has pushed builders and innovators offshore. He mentioned the CFTC and U.S. Securities and Change Fee (SEC) have already signed a joint interpretation clarifying which crypto property qualify as securities and which as commodities. The companies additionally entered a memorandum of understanding to coordinate surveillance, info sharing, and rulemaking.
Selig addressed prediction markets at size. The company issued an advance discover of proposed rulemaking in March 2025 soliciting public touch upon the best way to regulate occasion contracts, that are derivatives traded on registered exchanges. He advised the committee the CFTC has not allowed contracts tied to conflict, terrorism, or assassination on its regulated platforms, however declined to prejudge the result of the rulemaking course of. A number of Democrats, together with Rep. Jim Costa of California and Rep. Teresa Leger Fernandez of New Mexico, argued that prediction market sports activities contracts instantly undermine tribal gaming compacts and state sovereignty.
Rep. Austin Scott of Georgia raised issues about decentralized trade ( DEX) platforms comparable to Hyperliquid, which lists perpetual contracts on crude oil with out segregated funds, market surveillance, or U.S. oversight. Scott mentioned volumes on these platforms might attain 200,000 orders per second and could possibly be affecting home gasoline costs. Selig mentioned the CFTC is monitoring these offshore markets and needs to convey that exercise again below home regulation.
Selig advised the committee the company has additionally taken steps to make clear the capital therapy of cost stablecoins, issued steerage on tokenized collateral, and outlined obligations for U.S.-based software program builders constructing on blockchain infrastructure. He known as laws the one strategy to lock in these protections long-term towards future administrative reversals.
The listening to additionally coated rising fertilizer costs, issues about 24-hour buying and selling fashions for agricultural commodity contracts, the CFTC whistleblower fund’s funding stability, and a push by a number of members to codify current no-action letters that shield church pension plans and college endowments from commodity pool operator registration necessities.
Committee Chairman GT Thompson of Pennsylvania closed by saying he and Craig will ship a letter to the White Home urging the immediate nomination of certified people to fill all 4 vacant commissioner seats on a bipartisan foundation. The listening to document will stay open for 10 days.
