Analyst teams from TD Cowen, led by Jarrett Seiberg, contend that the CFTC’s proposed rules for leveraged crypto trading are unlikely to be finalized before the 2028 U.S. presidential election, making the outcome highly contingent on political factors.

They view the 2028 election as a de facto deadline: if rules aren’t finalized before a new administration takes office, they risk being deprioritized, revised, or scrapped amid competition with the SEC over digital commodities.

The forecast is that the CFTC’s rulemaking on digital asset leverage and margin trading will likely extend into 2028, with the process vulnerable to shifts in administration and regulatory leadership.

Industry and legal experts are split: some expect near-term agency action to yield benefits, while others say only legislation can provide durable certainty; the failure of the CLARITY Act could inadvertently keep barriers to entry intact.

The broader takeaway is that regulatory certainty for Bitcoin participants—miners, custodians, and institutions—depends on finalized rules rather than proposals, underscoring the importance of legislative backing for a stable regime.

Regulators have begun drafting with a goal to avoid broad direct jurisdiction over the spot market, and the CLARITY Act’s failure influences current CFTC and SEC approaches.

TD Cowen warns that rushing the rulemaking could invite judicial intervention, with expedited processes heightening the risk of procedural blocks by courts.

The CLARITY Act’s congressional failure is cited as a catalyst for agency-driven regulation, yet rules remain vulnerable to policy reversals under a new administration and potential court challenges.

The timing concern stems from the stalled CLARITY Act, which would have granted authority over spot trading; TD Cowen views the rule as a temporary placeholder while legislative efforts stall.

The piece emphasizes ongoing political and legal uncertainties around the CFTC framework and the potential for shifts with different administrations and commissioners.

The CFTC has started rulemaking to oversee retail crypto leverage and margin trading, including proposed proof-of-reserves audits and oversight of state-licensed platforms, while avoiding broad direct reach over spot trading.

The proposed rules aim to establish a federal framework for crypto platforms, requiring proof-of-reserves audits and extending CFTC authority to state-licensed entities, without covering spot market transactions.