TD Cowen Says CFTC Crypto Leverage Rules May Not Be Finalized Before 2028 Election

The U.S. Commodity Futures Trading Commission’s effort to regulate leveraged cryptocurrency trading may not be finalized before the 2028 presidential election.

The Block reported on Oct. 12 that Jarrett Seiberg, managing director at TD Cowen’s Washington Research Group, said in a note that the CFTC’s work on new rules will probably take longer than expected. “There is not much time left,” he wrote, adding that a proposed rule could emerge as early as late in the first quarter of 2027 or early in the second quarter, while final adoption may be pushed back to early 2028.

The CFTC last week began drafting rules to oversee leveraged and margined crypto trading by retail investors at the federal level. The plan is expected to include proof-of-reserves audit requirements for trading platforms and CFTC supervisory authority over businesses licensed by state regulators. At the same time, the agency is trying to avoid seeking direct jurisdiction over the broader spot crypto market.

The regulatory discussion intensified after the CLARITY Act failed to advance. The bill would have given the CFTC broad oversight of the crypto spot market, but it failed to pass a procedural vote in the Senate. Since then, the CFTC and the U.S. Securities and Exchange Commission have been using their own regulatory tools, including an innovation exemption framework, to build an institutional foundation for the crypto market.

The issue is that rules written by regulators can be more vulnerable to policy shifts than legislation. If the timeline for finalizing the rules overlaps with the 2028 presidential election, the next administration could halt or revise the effort depending on its policy direction, Seiberg said. That leaves uncertainty over whether the current proposal will reach final implementation.

He also argued that speeding up the rulemaking process is unlikely to solve the problem. “The faster the agency moves, the greater the risk that a court blocks the rules on procedural grounds,” he wrote. Even if the CFTC moves carefully, legal disputes could continue beyond 2028.