A note from the investment bank TD Cowen said that the new crypto trading rules from the Commodity Futures Trading Commission probably won’t be in place until early 2028.
Seiberg puts the final framework in early 2028
The wait was measured in a note sent on Monday by Jaret Seiberg, managing director of TD Cowen’s Washington Research Group. In the best case, a formal proposal would come in late Q1 or early Q2 2027.
He said that the final rules wouldn’t come out until the first few months of 2028.
To start the process, the CFTC sent out an advance notice of proposed rulemaking on October 5, as Cryptopolitan reported. Now, the agency writes up plans and asks for feedback from the public before writing anything binding.
The public has 60 days to comment after the notice appears in the Federal Register. After that window closes, the CFTC still has to put out formal proposed rules and then final ones.
Seiberg said that the notice is a good start for crypto platforms. The process could go on until 2028, which is when the presidential election will happen. Rules made by one administration can be undone by the next, he said.
Congress held up its crypto bill, so the CFTC is building the framework itself. The head of the CFTC, Michael Selig, said that lawmakers never sent a bill to the president and that the agency already has the legal power to set up a federal structure for the crypto market.
The CFTC and the Securities and Exchange Commission would have been in charge of different areas of oversight under the CLARITY Act. Spot exchanges would also have been required by law to be registered.
Cryptopolitan said that on September 15, the bill failed a cloture vote in the Senate by a vote of 49 to 50. To move forward, it needed 60 votes.
Since it was put on hold, the CFTC and SEC used the powers they already had, such as an innovation exemption.
JPMorgan has already said that the CFTC’s approach won’t last as long as legislation.
Fast-tracking raises the odds a court blocks CTX and CAM
The CFTC wants to make two rules for retail trade that uses margin and leverage. Regulation Crypto Asset Transactions, or CTX, spells out which trades the agency claims oversight of.
A new federal exchange license to host them would be made by Regulation Crypto Asset Markets, or CAM. Both of them leave out the normal spot deals.
Seiberg said that platforms that were subject to the rules would have to do audits of their proof-of-reserves. The CFTC would also have control over venues that are currently licensed by each state.
Most cryptocurrency platforms in the US are allowed to operate by state licenses for payment companies. These are the same licenses that money transfer services use. New York has its own BitLicense.
Direct trade on the spot market is still out of reach. The Commodity Exchange Act says that the agency can’t do much about it unless Congress does something.
The CFTC only has power to enforce laws against fraud and manipulation on the spot market. It leaves trading on that market up to the states’ money-transmission laws.
Seiberg warned that a fast process makes it more likely that a court will block the rules for procedural reasons. “Even if the agency is careful, we still expect legal challenges could extend beyond 2028,” Seiberg said.
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