TD Cowen: CFTC Crypto Regulation Unlikely to Be Finalized Before 2028 Election

The U.S. Commodity Futures Trading Commission (CFTC) is unlikely to finalize its proposed leverage trading regulations for digital assets before the 2028 presidential election, according to a new analysis. Investment bank TD Cowen projects that agency-led rulemaking will likely take longer than expected, with the election serving as a political wildcard that could determine the regulation's fate.

Jaret Seiberg, managing director at TD Cowen's Washington Research Group, wrote in a note dated October 12 (local time) that "time is running short," adding that a draft rule could emerge "as early as late Q1 or early Q2 2027," with finalization potentially pushed to early 2028.

The CFTC initiated rulemaking last week to establish federal oversight of retail crypto leverage and margin trading. The proposal is expected to include proof-of-reserves audit requirements for trading platforms and CFTC supervisory authority over state-licensed entities. Notably, the agency is steering clear of asserting direct jurisdiction over spot crypto trading broadly.

Political Vulnerability of the Rulemaking

The regulatory push gained momentum after the CLARITY Act failed to advance in Congress. The bill would have granted the CFTC broad oversight authority over spot crypto markets but failed to clear a procedural vote in the Senate. Since then, the CFTC and the U.S. Securities and Exchange Commission (SEC) have been building institutional frameworks for the crypto market through their own regulatory tools, including innovation exemption programs.