CFTC crypto regulatory framework may not be completed until early 2028, TD Cowen says there is a risk it may never be finalized

Odaily News: Jaret Seiberg, Managing Director of TD Cowen's Washington Research Group, said in a report released on Monday that the CFTC's advance notice of proposed rulemaking for crypto platforms issued last week is a positive step, but the agency may not complete the rulemaking until early 2028. As the 2028 election cycle approaches, there is a risk that the relevant rules may ultimately fail to be finalized. Seiberg expects that the CFTC will not issue a proposal until the end of the first quarter or the beginning of the second quarter of 2027 at the earliest, and may not finalize the rules until early 2028.

According to Seiberg, the proposed rules would require platforms to maintain proof-of-reserves audits and give the CFTC jurisdiction over state-licensed platforms, but would avoid direct jurisdiction over spot market trading. He said that if the CFTC accelerates the rulemaking process, it could increase the risk that courts block the rules on procedural grounds, and related legal challenges could extend beyond 2028.