TD Cowen: CFTC's Crypto Regulatory Framework May Not Be Completed Before 2028

According to a report by Golden Finance, on October 13, Jaret Seiberg, Managing Director of TD Cowen's Washington Research Group, stated in a report released on Monday that the CFTC's advance notice of proposed rulemaking issued last week is a positive step for crypto platforms. However, the agency may not complete the rulemaking process until early 2028, and with the 2028 election cycle approaching, there is a risk that the rules may ultimately fail to materialize. Seiberg noted that "time is running out," and he expects the CFTC to release a proposal no earlier than the end of Q1 or the beginning of Q2 in 2027, with the finalization of the rules potentially delayed until early 2028. Last week, the CFTC proposed a federal regulatory framework for crypto platforms but avoided asserting direct jurisdiction over spot market trading. According to Seiberg, the proposed rules would require platforms to maintain "proof-of-reserves audits" and grant the CFTC jurisdiction over state-licensed platforms. Previously, the U.S. Senate failed to pass legislation in an initial vote that would grant the CFTC broad authority over spot crypto trading. As a result, the CFTC and SEC have stepped in to regulate the crypto industry, including introducing long-awaited innovation exemptions. However, both agencies lack the permanence that legislation could provide. Seiberg also pointed out that if the CFTC decides to expedite the rulemaking process, it could increase the risk of court intervention. He stated that accelerating the process would heighten the risk of judges blocking the rules on procedural grounds. Even if the agency proceeds cautiously, legal challenges could extend beyond 2028.