A Democratic sweep of Congress could stall the CLARITY Act and other crypto market structure legislation for the next two years, according to TD Cowen analyst Jaret Seiberg. In a client note published after the Associated Press called both chambers, Seiberg also warned that scrutiny of Donald Trump’s crypto ventures could prevent lawmakers from advancing a version of the bill supported by the industry.
Seiberg described the election outcome as negative for the sectors covered by his analysis, but said he expects the SEC and CFTC to remain active on crypto, prediction markets and perpetual futures. He cited the lame-duck session, congressional investigations of Trump, the debt ceiling and populist proposals such as interest rate caps as issues to watch.
The CLARITY Act passed the House in July 2025 but failed to advance in the Senate after a 49–50 cloture vote in September, according to the report. Unless revived during the lame-duck session, the bill is set to expire on Jan. 3. Seiberg had already considered passage in the next Congress unlikely; Sherrod Brown’s return to the Senate from Ohio has made him more confident in that assessment.
The analyst said investigations into the Trump family’s crypto businesses, including World Liberty Financial, could make it impossible to pass a version of the CLARITY Act that the crypto sector would support. That raises the question of whether any bill acceptable to the industry can pass under the next Congress.
Seiberg expects no immediate change in the SEC’s or CFTC’s approach. He said the agencies have taken steps this year involving bitcoin and equity perpetuals, as well as a joint crypto taxonomy, without new legislation. He identified a CME lawsuit over the approval of perpetuals as a potential challenge to that regulatory path.
The note also pointed to broader political and economic risks. Seiberg expects lawmakers to try to raise the debt ceiling during the lame-duck session but doubts they will succeed, and said divided government could increase the risk of a shutdown or default standoff in 2027. He also sees a possibility that Trump and Senator Elizabeth Warren, who is described as a likely Senate Banking Committee chair, could find common ground on an interest rate cap, potentially exposing fintech companies more than banks.
On the Federal Reserve, Seiberg expects Democrats to withhold confirmation of Trump’s nominees unless the president fills Democratic seats at agencies including the FDIC and SEC, which he considers unlikely. He also said the difficulty of confirming a replacement could make Trump less inclined to fire Fed Governor Lisa Cook, removing one source of pressure on the central bank as it considers a December rate increase.
Sources: Bitcoin Magazine.