TD Cowen: Democratic Sweep Makes a Crypto-Backed CLARITY Act ‘Impossible’

The Democratic sweep of Congress closes the door on crypto market structure legislation like the Clarity Act for the next two years and may rule out any version the industry would support, TD Cowen told clients in a note published after the Associated Press called both chambers.

“We view this outcome as negative for our sectors,” Washington analyst Jaret Seiberg wrote. The caveat he has repeated all cycle still holds: the election “will not impact the ability of regulators to push their de-regulatory agendas,” and he expects the SEC and CFTC “to remain active including on crypto, prediction markets and perps.” 

The items he flags to watch are the lame-duck session, congressional investigations of Trump, the debt ceiling and populist bills such as interest rate caps.

The note lands after a bruising week for the industry: a record $6.34 billion Binance hack, the loss of House allies Bryan Steil, Zach Nunn and Ann Wagner, and more than $170 million in super PAC spending that failed to deliver the Congress it was meant to buy.

Clarity, Brown and World Liberty

Seiberg’s crypto calls build on a note he published Tuesday, before the results. Sherrod Brown’s return to the Senate from Ohio, after about $64 million in industry money went to stopping him, “damages the crypto industry’s political clout,” he wrote. He had not expected the CLARITY Act to pass in the next Congress; Brown’s win “makes us more confident in our prediction.”