A U.S. crypto market-structure bill may be closer to a political negotiation than a policy rewrite, TD Cowen said, arguing that vacant Democratic seats at the SEC and CFTC have become a lever for reopening stalled talks.
The firm said the legislation’s core question, whether certain digital assets fall under the SEC as securities or under the CFTC as commodities, is not what’s freezing progress right now. Instead, the sticking point is a dispute over conflict-of-interest restrictions aimed at senior government officials and their families.
TD Cowen said Democrats want tighter limits on officials’ crypto-related business interests and transactions, and are unlikely to back down on the demand as the issue has become part of their messaging ahead of midterm elections. Republicans, the firm added, view the proposal as a non-starter, arguing the president would not sign a bill that effectively forces divestment or restricts family involvement in crypto ventures.
TD Cowen’s suggested off-ramp is sequencing: the administration could move to fill Democratic vacancies at both regulators, while Democrats accept a version of conflict-of-interest rules that would apply only after the next inauguration.
The firm noted that partisan lines have already shown up in committee action, and it remains unclear whether the bill can secure the bipartisan support needed to advance through the Senate’s remaining steps.
