Rep. Andrea Salinas Questions CFTC Chairman During House Committee on Agriculture Hearing

Click here to watch Rep. Salinas' full remarks.

WASHINGTON, D.C. - Today, Congresswoman Andrea Salinas (OR-06) questioned Commodity Futures Trading Commission (CFTC) Chairman Michael Selig during a House Committee on Agriculture hearing. Rep. Salinas pressed Chairman Selig on the growing risks involved in trading and prediction markets.

Rep. Salinas warned that, by understaffing and underfunding the agency, the Trump Administration has left regulators unable to keep pace, raising the stakes for Americans' financial security and increasing the risk of serious behavioral health harms.

A transcript of Salinas' remarks is available below:

REP. SALINAS: Thank you, Chair Thompson, for holding today's hearing, and Ranking Member Craig. And thank you to Chairman Selig for being with us today. In his speech on March 31st that you enclosed with your two-page testimony, Director of Enforcement David Miller outlined the Division of Enforcement's five enforcement priorities and stated that CFTC will hire additional staff to help address these priorities, and you've been repeating that here today. However, since FY24, the CFTC's budget for the Division of Enforcement has shrunk significantly, and the FY27 budget only requests three additional staff. Will three additional staff members be able to adequately address these five priorities, specifically insider trading and fraud in the predictions markets. And how specifically do you use AI with human interaction and intervention oversight to address this?

CHAIRMAN SELIG: Congresswoman, as I said in my opening statement, we take enforcement absolutely critically seriously. This is a top priority of mine. As Chairman, I cannot have threats to our markets such as insider trading, manipulation, and fraud, undermining the real important policy work that we're doing here, the real important investor protections that we're putting in place. So David Miller has been staffing up within the Division of Enforcement. And the number that you cite, the three persons, I believe, is possibly not exactly correct. We certainly will continue to expand. We have a number of job postings currently on USAJOBS, and we'll continue to post as needed. Of course, tools such as AI are going to be very helpful in surveilling and bringing investigations, and we're incorporating that into various workflows. So we are a cop on the beat, and we're absolutely taking this mission-critical function seriously.

REP. SALINAS: Thank you. How many investigations related to prediction markets are currently ongoing?

CHAIRMAN SELIG: Congresswoman, we have numerous investigations ongoing. I can't speak to the specific number and the specifics of those investigations.

REP. SALINAS: Why not?

CHAIRMAN SELIG: As that is something that's non-public. It would hinder the investigations themselves?

REP. SALINAS: In the aggregate how many investigations are ongoing - you can't give us that number?

CHAIRMAN SELIG: Congresswoman, we receive hundreds of tips that prompt investigations. So there's many, many, whether it's in the hundreds or thousands, investigations ongoing. I can't speak to the specific number. But of course, we're always receiving tips and always responding and making sure that we're protecting our markets.

REP. SALINAS Okay, those hundreds to thousands of investigations - how long do the investigations typically take?

CHAIRMAN SELIG: Congresswoman, the investigations can take varying lengths. It really depends on the nature of the investigation. We are not going to rush these investigations, and then oftentimes they require coordination with law enforcement and other agencies, but investigations take varying lengths. Sometimes it can take up to a year or multiple years before we charge or file any sort of complaint.

REP. SALINAS: Okay, thank you. Has the commission considered whether additional safeguards such as geofencing might be appropriate in certain contexts, including with respect to activity occurring on tribal lands? And if so, what factors would inform that kind of rulemaking

CHAIRMAN SELIG: Congressman, we've come out with an advance notice proposed rulemaking when it comes to prediction markets. So we are soliciting comments as to any changes to our rules with respect to these products. We, of course, are taking input from members of the tribal community. I've met with several of the tribes and will continue to meet with the tribes going forward. So that's certainly an issue that we'll consider, and we'd be happy to work with your office if it's something of importance to you.

REP. SALINAS: Thank you. I would like to work with you on that. Can you explain how the lack of geofencing might interact with the Indian Gaming Regulatory Act?

CHAIRMAN SELIG: Congresswoman, this again is a matter that I don't want to prejudge. It is something that can be addressed in our rulemaking. So we've asked for public comment on these questions.

REP. SALINAS: Thank you. One final question. I'm co-chair of the Mental Health Caucus with one of my colleagues, Mr. Bacon, as well. There's growing attention around behavioral health risks in both financial trading and gambling. How does the Commission think about mitigating risks of excessive or compulsive participation in prediction markets? And is this something that you track?

CHAIRMAN SELIG: Well, Congresswoman, this is something that is deeply concerning to the extent that there's addiction or other harms coming from the use of our financial markets. We take that very seriously and are here to assist, whether it's through legislation or otherwise, with these efforts. We also have market participants, such as brokers and exchanges, that have responsibilities to their customers to disclose and educate on the various risks in using the market. So we'll continue to work with our exchanges and our brokers to make sure that they're providing that information and disclosure to their market participants.

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