CFTC's Crypto Rulebook May Not Be Finished Until 2028, TD Cowen Warns

The CFTC just started writing federal rules for leveraged crypto trading. Its own analyst read says the finished version may not exist until early 2028, after the next presidential election cycle is already underway.

What the agency actually proposed

On October 5, the Commodity Futures Trading Commission published an advance notice of proposed rulemaking covering retail crypto transactions that are leveraged, margined or financed, which the agency calls CTXs. Two rulemakings would follow. Regulation CTX defines when those transactions fall under the Commodity Exchange Act, and Regulation CAM creates a "crypto asset market" registration category for exchanges that list only them.

The framework does not claim direct jurisdiction over ordinary spot trading. Chairman Michael Selig pitched it as a single federal option instead of a state-by-state patchwork, and conceded the agency cannot force crypto assets onto CFTC-registered venues without Congress acting.

TD Cowen's timeline

Jaret Seiberg, a managing director at TD Cowen's Washington Research Group, puts the earliest formal proposal at late Q1 or early Q2 2027, with finalization possibly slipping into early 2028. That leaves the rule exposed to an election cycle that could replace the officials writing it.

Seiberg flags the opposite risk too: rushing the process invites a court to strike the rule down on procedural grounds, and litigation could run past 2028 either way. His read is that agency rulemaking does not carry the durability legislation would have.

Why this matters if you trade with leverage

The backdrop is a failed Senate vote on the CLARITY Act, which would have handed the CFTC explicit authority over spot crypto trading. With Congress stalled, both the CFTC and the SEC are regulating through existing powers, including a long-awaited innovation exemption.

So the rules governing leveraged crypto in the US are being written by agencies whose work can be undone by the next administration or a judge. Seiberg says the plan would require platforms to keep proof-of-reserves audits and would extend federal oversight to state-licensed platforms. Nothing is final yet, and comments on the notice run for 60 days after it hits the Federal Register.