TD Cowen sees a realistic risk that the CFTC's leveraged crypto rules unravel before the 2028 election
TD Cowen's Jaret Seiberg says the CFTC's leveraged retail crypto rules may not be final until early 2028, colliding with the election cycle. A new administration could revise or drop them, and a rushed schedule invites a procedural court challenge.
The Investor · Invest desk
Timeline. October 5, 2026: CFTC advance notice launches the framework. October 12, 2026: Seiberg's note says the agency is unlikely to finish in time. First quarter of 2027, late at the earliest: formal proposal, per Seiberg.
| Date | Event | Claim |
|---|---|---|
| October 5, 2026 | CFTC launches framework with an advance notice | 9 |
| October 12, 2026 | Seiberg note: agency unlikely to finish in time | 2 |
| Q1 2027 | Formal proposal no earlier than late first quarter, per Seiberg | 4 |
What happened
- The CFTC launched the framework with an advance notice on October 5, 2026, built on its existing Commodity Exchange Act authority over leveraged, margined or financed retail commodity deals.
- Regulation CTX would bring a crypto transaction under CFTC oversight whenever leverage, margin or financing is offered, with an exception for actual delivery within 28 days, a test that may depend on who controls the private keys.
- Regulation CAM would set up a subcategory of designated contract market, called a crypto asset market, that lists only the covered transactions under tailored core principles.
- Contemplated safeguards include proof-of-reserves audits for platforms holding customer assets, anti-manipulation controls and intermediation through registered futures commission merchants.
Why it matters
- Who has to decide decision Platforms that skip leverage stay under state money-transmitter regimes and spend nothing on a federal build; those that opt in fund the audits and broker intermediation against a rule a successor could drop.
- What it limits constraint The CFTC cannot buy durability with speed: a faster calendar shortens the exposure to a new administration but raises the chance a court blocks the rules on procedural grounds.
- What doesn't add up contradiction Seiberg calls the advance notice constructive for platforms yet says the agency is unlikely to finish in time, so the same note supports engaging now and discounting the result later.
Seiberg's own dates do not put the final rule after the election. According to the note as reported by Crowdfund Insider, he expects a formal proposal in late Q1 or early Q2 of 2027 at the earliest [4], about six months after the October 5 advance notice [16], and finalization potentially extending into early 2028 [5]. Early 2028 falls earlier in the year than the 2028 election [17], and the gap between proposal and final rule comes to nine to twelve months [18]. The exposure comes after that: a new administration and fresh commissioners could revise, delay or abandon the rules [6], and even a careful process could face litigation stretching past 2028 [8].
"Time is running out," Seiberg wrote [3].
There is a third path that the report of the note does not mention. Chairman Michael Selig has described the effort as an interim measure pending legislation [14], and the CLARITY Act failed to advance in the Senate [15]. If a market-structure bill passed later, it would supersede the CFTC rules, and the reversal risk would matter only for the years in between. That is our inference, not Seiberg's.
We think the middle path is the base case: it matches Seiberg's dates and needs neither a rushed CFTC nor a Senate that has so far failed to move the CLARITY Act. The counter-thesis is that Selig compresses the calendar anyway and gets a rule on the books early enough to withstand a procedural challenge. The report does not say how a successor administration would treat the rules.
What to watch
- Publication of the formal proposal: a date before late Q1 2027 would undercut Seiberg's schedule and shorten the window a successor has to act.
- Any revival of Senate market-structure legislation after the CLARITY Act stalled, since a statute would supersede the CFTC rules.
- Whether any platform seeks registration as a crypto asset market before a final rule exists, which would show who is willing to carry the reversal risk.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
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Claim ledger
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- [1]
TD Cowen's analysis says the CFTC's emerging rules for leveraged retail cryptocurrency trading face a realistic risk of stalling or unraveling before the 2028 US presidential election.
- [2]
In a note dated October 12, 2026, Jaret Seiberg of TD Cowen's Washington Research Group described the CFTC's advance notice of proposed rulemaking as a constructive move for platforms, yet warned the agency is unlikely to complete the process in time.
- [3]
"Time is running out," Seiberg wrote.
- [4]
Seiberg estimated that a formal proposal would emerge no earlier than late in the first quarter or early in the second quarter of 2027.
- [5]
Seiberg estimated that finalization could extend into early 2028.
- [6]
Because agency-crafted rules lack the durability of congressional legislation, a new administration and fresh commissioners could revise, delay, or abandon them entirely.
- [7]
Seiberg added that accelerating the schedule would heighten the chance of a court blocking the rules on procedural grounds.
- [8]
Even a careful rulemaking process could still face litigation stretching past 2028.
- [9]
The CFTC framework was launched via an advance notice on October 5, 2026, and rests on existing authority under Section 2(c)(2)(D) of the Commodity Exchange Act, which already reaches leveraged, margined, or financed retail commodity deals.
- [10]
Regulation CTX would clarify when an offer of leverage, margin, or financing brings a crypto-asset transaction within CFTC oversight, even if the customer pays in full, subject to an "actual delivery" exception within 28 days that may turn on control of private keys.
- [11]
Regulation CAM would create a specialized subcategory of designated contract market registration called a "crypto asset market", whose venues would list only the covered crypto transactions under tailored core principles.
- [12]
Contemplated safeguards include proof-of-reserves audits for platforms holding customer assets, anti-manipulation controls, and intermediation through registered futures commission merchants.
- [13]
Ordinary fully paid spot trading would largely remain outside direct federal licensing, allowing platforms that avoid leverage to continue under state money-transmitter regimes.
- [14]
CFTC Chairman Michael Selig has himself described the effort as an interim measure pending legislation.
- [15]
Comprehensive market-structure legislation, including the CLARITY Act, failed to advance in the Senate.
- [16]
A formal proposal at the end of the first quarter of 2027 would come about six months after the October 5, 2026 advance notice.
- [17]
Early 2028, Seiberg's finalization window, falls earlier in the calendar year than the 2028 presidential election.
- [18]
On Seiberg's estimates, proposal to final rule spans roughly nine to twelve months.
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Sources
1 independent publisher whose own reporting we read for this story.
- crowdfundinsider.comTD Cowen Warns CFTC Crypto Framework Risks Missing 2028 Election Deadline
1 article · October 13, 2026
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Topics
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