Investment Bank TD Cowen: Progress on the <i>CLARITY Act</i> Could Be Accelerated if Trump Agrees to Fill Democratic Vacancies at the SEC and CFTC

BlockBeats News, February 18th, Investment Bank TD Cowen stated that filling the Democratic vacancies at the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission may help advance negotiations on the U.S. Cryptocurrency Market Structure Bill.

The investment bank pointed out that the biggest obstacle to the bill's passage is not its core framework (i.e., whether digital assets should be regulated by the SEC as securities or by the CFTC as commodities), but rather a political dispute over conflict-of-interest rules.

Democrats are pushing for a ban to prevent senior government officials and their families from engaging in specific financial transactions involving digital assets. TD Cowen stated that given Trump's involvement in the cryptocurrency project World Liberty Financial, this proposal would involve Trump and his family. Bloomberg estimated last month that Trump has made profits of around $1.4 billion from his cryptocurrency project. The Trump family also holds a 20% stake in the mining firm American Bitcoin.

According to TD Cowen, Democrats are unlikely to back down from this requirement as the party has turned Trump's cryptocurrency holdings into campaign material for the midterm elections. Last month, in a vote on a bill in the Senate Agriculture Committee, no Democratic senators voted in favor, citing concerns about Trump's cryptocurrency project. It is unclear whether Democrats will support the bill in the Senate Banking Committee.

TD Cowen stated that Republicans oppose the proposal because they believe Trump would veto any legislation requiring his family to divest from cryptocurrency holdings. The report adds that even as industry groups continue to negotiate the cryptocurrency regulatory framework, this disagreement has led to a political impasse.

One possible path for progress is a bipartisan compromise. In this scenario, Trump would agree to fill the Democratic vacancies at the SEC and CFTC. In return, Democrats would accept conflict-of-interest terms that would only take effect after the next president takes office.