Reed Presses CFTC Chair on Lack of Enforcement Action

WASHINGTON, DC - U.S. Senator Jack Reed is pressing the leadership of the Commodity Futures Trading Commission (CFTC) over delays in publishing the CFTC's annual enforcement report and questioning whether the CFTC is doing enough to police the integrity of derivatives markets and crack down on fraud, manipulation, and abuse.

Today, Senator Reed sent a letter to the head of the CFTC noting: "There is significant evidence that the Commission, of which you are the chair and sole member, has largely abandoned its enforcement mission. Since 2024, the Commission has reduced headcount in the Enforcement Division by an astonishing 25% (from 140 to 105) and its budget by 27% (from $64 million to $47 million). According to the Commission's website, it filed only one new enforcement action in 2025 and one in 2026. The obvious conclusion is that the CTFC is not dedicating sufficient resources to protecting investors, particularly in prediction markets and digital asset markets where significant amount of retail trading creates a high degree of risk and powerful incentives for illicit activity."

While the CFTC made headlines this week by filing a parallel civil action alongside more serious criminal charges brought by the Department of Justice against a U.S. soldier arrested for prediction markets betting on a U.S. military mission that captured Venezuelan leader Nicolás Maduro, Reed noted that so far the soldier is the one and only person who has been subject to a new CFTC enforcement action for the entire year across all markets that the agency oversees. This includes both new and emerging markets for digital assets and predictions with high volume of retail speculation, as well as the agency's "core" swaps and derivatives markets which are much more economically significant and where institutions hedge agriculture, energy, currency, credit default, and interest rate exposures.

Congress created the CFTC in 1974 to police U.S. derivatives markets. Its Division of Enforcement brings cases involving fraud, insider trading, market manipulation and false reporting under the Commodity Exchange Act.

Full text of the letter follows:

The Honorable Michael Selig, Chair

Commodity Futures Trading Commission

1155 21st Street, NW Washington, DC 20581

Dear Chair Selig:

I write to request that you release detailed data on the Commodity Futures Trading Commission's (CFTC or the Commission) enforcement program for 2025 without further delay. This information has customarily been published each year, usually in November or December, through a press release with supporting data. It is now at least four months late.

There is significant evidence that the Commission, of which you are the chair and sole member, has largely abandoned its enforcement mission. Since 2024, the Commission has reduced headcount in the Enforcement Division by an astonishing 25% (from 140 to 105) and its budget by 27% (from $64 million to $47 million). According to the Commission's website, it filed only one new enforcement action in 2025 and one in 2026. The obvious conclusion is that the CTFC is not dedicating sufficient resources to protecting investors, particularly in prediction markets and digital asset markets where significant amount of retail trading creates a high degree of risk and powerful incentives for illicit activity.

The decline in CFTC enforcement undercuts your claim in recent testimony before the House Agriculture Committee that you "take enforcement absolutely critically seriously" and have a "zero tolerance policy" for insider trading. And as I and others have written, there have been credible allegations of insider trading tied to various geopolitical events in the commodity futures markets and in prediction markets, including military activity in Venezuela and Iran. Yet only one person has been subject to enforcement for this nefarious activity.

In the CFTC's Fiscal Year 2027 budget proposal, you have requested an increase of only 3 employees and $6 million for the Enforcement Division. These resource increases hardly make up for the capacity that has been lost and are insufficient to keep pace with the explosive growth in prediction markets, which are dominated by sports-based contracts with which the agency has no experience or expertise.

It is critical for the CFTC to release its annual enforcement results so Congress can review the Commission's performance and evaluate its budget request for FY 2027. I ask you to publish this information by May 8, 2026. Thank you for your attention to this request.

Sincerely,

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