WASHINGTON, April 16, 2026 — CFTC Chairman Michael Selig appeared before the House Agriculture Committee on Wednesday to answer lawmakers' pointed questions about whether a regulator that has lost one in four employees can realistically oversee a derivatives market now stretching from political betting platforms to decentralized exchanges like Hyperliquid.

The hearing arrived at a fraught moment. The CFTC is simultaneously fighting state governments in court over prediction market jurisdiction, investigating suspicious trades made ahead of a presidential foreign policy announcement, inching toward formal rules for crypto perpetual futures, and doing all of it with 152 fewer staff than it had at the end of fiscal year 2024. Full-time headcount fell from 708 at the end of FY2024 to 556 at the end of FY2025, a reduction of roughly 25 percent driven by Trump administration downsizing pressure. The enforcement division is targeting a staff level of just 108, which would put it approximately 23 percent below its FY2025 figure of 140. The agency's supervised mandate expanded over the same period: the number of Designated Contract Markets under its oversight grew from 18 to 23 between FY2024 and FY2025, and pending crypto market structure legislation in Congress would add spot digital asset markets to CFTC authority, a shift analysts have described as a Dodd-Frank-scale expansion of the agency's remit.

Selig's answer to the staffing question leaned heavily on artificial intelligence. He told the committee that tools including Microsoft Copilot have allowed the agency to operate more efficiently and effectively, saying: "Tools such as AI are going to be very helpful in surveilling and bringing the investigations." At the same time, the agency has submitted a budget request of $410 million for FY2027, a 12 percent increase over the current year, along with a proposal to add 14 full-time positions and reach a total of 650 staff. The agency also wants Congress to authorize user fees on market transactions as a funding mechanism. Walt Lukken, CEO of the Futures Industry Association, described the request as "a pretty modest increase" relative to the workload the CFTC is taking on. Cheryl Isaac of Alston and Bird offered a sharper assessment: "In this environment, if the regulator is asking for more resources, it should be taken seriously."

The Iran ceasefire trading scandal gave the hearing much of its urgency. On March 23, more than $500 million in crude oil futures changed hands in the 15 minutes before President Trump publicly announced a ceasefire agreement with Iran. Separately, NPR reported that at least 50 accounts newly created on the prediction platform Polymarket placed large wagers on the ceasefire shortly before it was announced, generating substantial profits. The White House issued an internal advisory warning staff against placing such bets. Senators Elizabeth Warren and Sheldon Whitehouse said that "this pattern raises serious questions about whether there has been recurring misappropriation of material nonpublic government information." Selig addressed the conduct directly: "I want to be crystal clear: to anyone who engages in fraud, manipulation, or insider trading in any of our markets, we will find you, and you will face the full force of the law."

Prediction markets have grown fast enough to make the jurisdictional fight consequential. Global monthly volume reached $25.7 billion in March 2026, the second highest figure on record and roughly 13 times the volume recorded in the same month a year earlier. Kalshi alone processed about $13 billion in March; Polymarket processed roughly $10 billion. Kalshi is available in 143 countries, a scale that illustrates the global dimensions of the regulatory dispute. The CFTC is currently suing Arizona, Illinois, and Connecticut to establish exclusive federal authority over prediction markets offered on regulated exchanges, and a Third Circuit ruling issued this month backed the agency's position. Selig put the principle plainly: "It doesn't matter if it's on sports, politics or anything else, if it's a validly offered product within a CFTC-regulated exchange, then we regulate that." He has also framed the consequences of inaction in stark terms: "Unregulated prediction markets could be the next FTX." The agency's recent history adds context to that posture. Selig's predecessor nominee, Brian Quintenz, had his nomination withdrawn in October 2025 over conflicts of interest tied to his Kalshi board membership and allegations of misappropriating confidential CFTC information, a history that shapes the agency's relationship with the very platforms now at the center of the hearing.

Hyperliquid came up directly during questioning, specifically in relation to the CFTC's initiative known as Project Crypto, which would bring crypto perpetual futures contracts (derivatives that allow traders to speculate on asset prices without holding the underlying asset or having an expiry date) into the U.S. regulatory framework. In March, Selig said approval was expected "within the next month or so," a timeline that had already elapsed by the time the April 16 hearing convened, with no formal rules yet issued. Hyperliquid is a decentralized perpetuals exchange built on its own blockchain with a reported team of roughly 11 people and no venture backing. It held approximately 26 percent of the global decentralized derivatives market as of late 2025. Its scale helps explain its congressional prominence: the platform processed roughly $829 billion in perpetuals volume in a single month in late 2025 and recorded $840 million in crude oil perpetuals volume in a single day. Its HYPE token was trading near $43.55 at the time of the hearing, with a market cap of approximately $10.38 billion and 24-hour trading volume of $484 million. The token gained about 20 percent in the week leading up to the hearing. Hyperliquid has already submitted a formal opinion letter to the CFTC and allocated one million HYPE tokens to fund the Hyperliquid Policy Center, a dedicated body focused on perpetual derivatives rules.

The stakes extend well beyond U.S. borders. For retail traders across South Asia and Africa, platforms like Hyperliquid and Polymarket represent some of the only accessible routes to derivatives and event contracts. Hyperliquid requires no identity verification, which has made it a practical option for users in India, Nigeria, Kenya, and Pakistan who face restrictions accessing leverage on U.S.-regulated exchanges. The platform's HIP-3 upgrade enables permissionless creation of commodity perpetuals, a capability with direct relevance for small agricultural traders in South Asia and Africa who cannot access traditional commodity exchanges. Polymarket's crypto-native structure means users need only a wallet, with no dollar-denominated bank account required. Rep. Angie Craig summed up a broader bipartisan concern at the hearing: "The agency's workforce is stretched too thin." Lawmakers are also preparing a bipartisan letter to the White House over unfilled CFTC commissioner positions, a concrete next development to watch as pressure on the agency builds. Selig's original March projection for crypto perp rules had already passed with no formal announcement by the hearing date, and no updated deadline was offered at the session. The outcome carries dual risks for users in emerging markets: if the CFTC imposes KYC requirements that prompt Hyperliquid to geofence certain jurisdictions, millions of traders lose access to the only leveraged derivatives infrastructure available to them; if regulation fails or stalls indefinitely, those same users remain on permissionless platforms that Selig himself has compared to the conditions that produced FTX.