TD Cowen sees Clarity Act passage risk rising in U.S. crypto market structure push

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Clarity Act risk in U.S. crypto

Highlights

TD Cowen warns prospects for the Clarity Act passing in 2024 are fading due to increased partisan conflict and controversial Trump-related provisions.
Senate Banking Committee advanced the crypto market structure bill despite Democrat and bank objections, but upcoming August recess and unresolved issues could delay passage to 2027.
Recent controversies including a $1.776 billion IRS settlement for Trump and government disclosure of 3,600 stock trades have further complicated the bill’s political outlook.

Political hurdles build before August window

As reported by The Block, TD Cowen says the crypto market structure bill is becoming less likely to pass this year as the political backdrop around the legislation deteriorates. Jaret Seiberg, managing director at TD Cowen's Washington Research Group, says in a note on Tuesday that the firm remains pessimistic the Clarity Act will become law this year.

Seiberg says the pressure point is whether Democrats can back the legislation without provisions that address conflicts of interest involving the president. He adds that Republicans could also become less willing to move the bill if that forces them to vote against amendments aimed at Trump.

Earlier this month, the Senate Banking Committee advances the bill despite objections from Democrats and banks. Seiberg says at the time that the committee vote shifts the fight to the full Senate rather than signaling a broader agreement, and he continues to warn that major obstacles remain before the August recess, after which delays could push passage to 2027.

Trump-related controversies reshape bill prospects

In his latest note, Seiberg points to several developments involving Trump and his administration that he says are worsening the political environment for the bill. One is a settled legal case with the Internal Revenue Service that creates a $1.776 billion anti-weaponization fund and permanently bars the IRS from auditing past tax returns of Trump, his family and related companies.

Seiberg also cites a recent New York Times investigative report on how prediction markets and crypto interests have pushed their agenda with the Commodity Futures Trading Commission. He notes that the allegations remain unconfirmed, while CFTC Chair Michael Selig tells the New York Times the agency is focused on major wrongdoing and is not playing favorites.

Another factor is government financial disclosures released earlier this month showing about 3,600 stock trades are executed on Trump's behalf during the first three months of 2026. The White House says the trades are carried out without the involvement of Trump or his family, but Seiberg says the broader controversy is increasing the chances lawmakers wait rather than act, even as the approaching midterm election leaves limited room for further delay.

Our earlier coverage of the Texas Republican Senate primary runoff looked at the high-stakes Cornyn–Paxton fight, where Trump’s endorsement helped shift momentum and intensified pressure on GOP leadership. The piece also highlighted how legal and ethics controversies around Paxton and broader party infighting could influence the general-election landscape and signal wider tensions inside the party.

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