TD Cowen: “The biggest variable for the market structure bill is the political conflict-of-interest provision”

An analysis has found that the key obstacle to the 'CLARITY Act,' a crypto (virtual asset) market structure bill, is not a jurisdictional dispute between regulators but rather political conflict-of-interest provisions.

According to crypto-focused media outlet The Block on the 17th (local time), TD Cowen said in a report, “The central hurdle to passing the bill is not whether crypto assets should be regulated as securities by the Securities and Exchange Commission (SEC) or as commodities by the Commodity Futures Trading Commission (CFTC),” adding that “the conflict-of-interest debate over banning crypto trading by the president, vice president, and members of Congress is the fundamental issue.”

The report in particular pointed to the political landscape ahead of the midterm elections as a key variable. It said that because Democrats are using former President Donald Trump’s crypto holdings as part of their election strategy, they are unlikely to easily drop related conflict-of-interest rules.

As a result, observers say the market structure bill’s trajectory will hinge less on technical regulatory delineations and more on whether political leaders can reach a consensus.