A new set of crypto trading rules from the Commodity Futures Trading Commission is unlikely to take effect before early 2028, according to a note from the investment bank TD Cowen. Until then, US crypto platforms would continue operating under the state-by-state licensing system they rely on today, with no binding federal framework for leveraged retail trading.

Seiberg sees final framework in early 2028

The timeline was laid out in a note issued Monday by Jaret Seiberg, managing director of TD Cowen's Washington Research Group. In the best case, he wrote, a formal proposal would arrive in late Q1 or early Q2 2027, with final rules not expected until the first few months of 2028.

The process formally began on October 5, when the CFTC issued an advance notice of proposed rulemaking, as Cryptopolitan reported. Under that procedure, the agency drafts its plans and seeks public feedback before writing anything binding. Once the notice appears in the Federal Register, the public has 60 days to comment. After that window closes, the CFTC must still publish formal proposed rules and then final ones. That step-by-step sequence is why the earliest binding obligations sit years out, and the notice's publication in the Federal Register will be the first tangible checkpoint to watch.

Seiberg described the notice as a good start for crypto platforms, but cautioned that the process could stretch through 2028, the year of the presidential election. Rules adopted by one administration can be undone by the next, he said. For platforms, that makes the durability of any eventual rule as relevant as its content.

Congressional stalemate leaves the CFTC to build its own framework

Congress's failure to advance crypto legislation is a central reason the CFTC is building the framework itself. Michael Selig, the head of the CFTC, has said lawmakers never sent a bill to the president and that the agency already holds the legal authority to establish a federal structure for the crypto market.

Under the CLARITY Act, the CFTC and the Securities and Exchange Commission would have divided oversight between them, and spot exchanges would have been required by law to register. According to Cryptopolitan, the bill failed a cloture vote in the Senate on September 15 by a margin of 49 to 50, short of the 60 votes needed to advance. Legislation remains the only route to that kind of divided, statutory framework.

Since the bill was shelved, the CFTC and SEC have relied on the powers they already have, including an innovation exemption. JPMorgan has already said the CFTC's approach is unlikely to endure as long as legislation would.

Fast-tracking raises the odds a court blocks CTX and CAM

The CFTC intends to write two rules covering retail trading that uses margin and leverage. Regulation Crypto Asset Transactions, or CTX, would spell out which trades the agency claims oversight of, while Regulation Crypto Asset Markets, or CAM, would create a new federal exchange license to host them. Both would exclude ordinary spot transactions. For platforms that today operate under state money-transmission licenses, the stakes are concrete: new proof-of-reserves audit obligations, a federal licensing option for venues hosting those trades, and formal clarity over which of their trades the agency claims oversight of.

Seiberg noted that platforms subject to the rules would have to conduct proof-of-reserves audits, and that the CFTC would also assert authority over venues currently licensed by individual states. Most crypto platforms in the United States operate under state licenses for payment companies, the same licenses used by money transfer services, while New York maintains its own BitLicense.

Direct spot-market trading remains out of the agency's reach. Under the Commodity Exchange Act, the CFTC cannot do much in that area unless Congress acts. Its authority on the spot market is limited to enforcing anti-fraud and anti-manipulation laws, leaving spot trading to state money-transmission regimes.

Seiberg warned that a rushed process increases the likelihood that a court blocks the rules on procedural grounds. "Even if the agency is careful, we still expect legal challenges could extend beyond 2028," he said. Until a final rule clears that process, federal oversight of US crypto markets will remain limited to anti-fraud and anti-manipulation enforcement, with state regimes filling the gap on spot trading.