CFTC crypto rule may not be final until early 2028, TD Cowen says, leaving it open to court challenges and the next administration

The CFTC’s new crypto rule may not be finalised until early 2028, according to TD Cowen, which says the agency is unlikely to publish a formal proposal before spring 2027.

Analyst Jaret Seiberg warned that rushing the process “will increase the risk that a judge blocks it on procedural grounds,” while a finish near the 2028 election could let a new administration reverse it.

CFTC crypto rule timeline extends into 2028

The CFTC initiated the process by issuing an advance notice of proposed rulemaking, a preliminary step that invites public input before an agency develops formal proposed regulations.

According to the notice published in the Federal Register, interested parties have until December 14, 2026, to submit comments. The agency must then consider the feedback and proceed through the subsequent stages of rulemaking before final requirements can take effect.

The distinction matters because an advance notice is not the same as a finalized regulatory framework. Exchanges, investors and other market participants must wait for further details before determining exactly how the requirements will affect their operations.

CFTC Chairman Michael S. Selig described the October initiative as a step toward greater regulatory clarity. In the agency’s October 5 announcement, he said: “The American people deserve clarity, certainty, and consumer protections in the crypto asset markets.”

Selig’s statement reflects the regulator’s stated objective of establishing a more uniform approach to eligible crypto trading activities. However, TD Cowen’s timeline suggests that translating that objective into enforceable rules will take considerable time.

Seiberg also views the process as vulnerable to political change. If the framework is completed near the end of the current administration’s term, a subsequent administration could reconsider or attempt to reverse the policy, potentially creating another period of uncertainty for the industry.

CTX and CAM rules target leveraged crypto trading

The proposed framework centres on two regulatory concepts: Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM). Together, they are intended to establish tailored requirements for certain retail crypto transactions involving margin, leverage or financing.

Under the proposed approach, CTX would address the transactions covered by the CFTC’s authority, while CAM would create a specialised registration category for eligible exchanges seeking federal oversight. Existing designated contract markets could also offer qualifying products under tailored requirements.

The CFTC crypto rule would introduce additional obligations for covered platforms, including proof-of-reserves audits intended to help demonstrate that customer assets are backed by the reserves exchanges claim to hold. It could also extend federal oversight to venues that currently operate under state-level licensing arrangements.

However, the initiative has important limits. It does not establish comprehensive federal supervision of ordinary spot crypto trading. The CFTC’s authority over spot-market activity remains constrained by existing law, particularly the Commodity Exchange Act, although the agency can pursue fraud and manipulation within its statutory jurisdiction.

That distinction leaves a significant gap for businesses seeking a single, nationwide regulatory framework. Many US crypto companies operate through state money-transmitter licences, while New York maintains its separate BitLicense regime.

The CFTC crypto rule could therefore offer participating platforms a clearer route to federal registration without resolving every question surrounding the regulation of digital assets.

Legal challenges could undermine the framework

The delayed timetable is not TD Cowen’s only concern. Seiberg warned that accelerating the process could expose the rules to legal challenges, particularly if the agency fails to follow the required administrative procedures.

“Expediting this process will increase the risk that a judge blocks it on procedural grounds,” Seiberg said, according to The Block. He added that legal challenges could continue beyond 2028 even if the agency proceeds carefully.

Such challenges could create uncertainty for exchanges deciding whether to pursue federal registration, retain state licences or adjust their product offerings. A court ruling against the agency could also force regulators to reconsider parts of the framework or restart portions of the rulemaking process.

The political outlook adds another complication. The Senate’s failure to advance the Digital Asset Market Clarity Act has left regulators pursuing measures under their existing statutory authority rather than relying on a new congressional framework.

The legislation was intended to establish clearer divisions of responsibility between the CFTC and the Securities and Exchange Commission, including a broader statutory structure for digital-asset market oversight. Without that legislation, agency-led initiatives may be more exposed to future policy changes and disputes over the limits of regulatory authority.

The CFTC crypto rule is consequently a potential step toward greater consistency, rather than a permanent legislative settlement. JPMorgan has also argued that regulatory action taken under existing authority is unlikely to provide the same durability as legislation passed by Congress.

For crypto exchanges and investors, the immediate takeaway is that regulatory clarity may arrive gradually rather than through a single decisive announcement. The CFTC crypto rule must still pass through public consultation, formal rulemaking and possible litigation before its full impact becomes clear.

If TD Cowen’s forecast proves accurate, the CFTC crypto rule could remain unfinished until early 2028, leaving the industry to navigate a changing regulatory environment while the US election cycle approaches.