TD Cowen: Trump controversies put Clarity Act at risk in 2026

TD Cowen said the political environment around the Clarity Act has worsened and that recent events make passage in 2026 unlikely. Jaret Seiberg, managing director at TD Cowen's Washington Research Group, wrote that a Senate Banking Committee vote earlier this month moved the fight to the full Senate rather than resolving key differences.

Seiberg cited a legal settlement between President Donald Trump and the Internal Revenue Service that established a $1.776 billion anti-weaponization fund and barred the IRS from auditing past tax returns of Trump, his family and related companies. The settlement resolved Mr. Trump’s $10 billion lawsuit against the IRS after he agreed to drop that suit in exchange for the fund’s creation. Seiberg wrote, “We have never seen a taxpayer-funded fund like this, which seems aimed at the President's supporters,” and added the agreement could set a precedent for future settlements.

A recent investigative report raised questions about influence by prediction market and crypto interests at the Commodity Futures Trading Commission. The report said experienced regulators were sidelined and highlighted business ties between members of the Trump family and several firms in those sectors. Seiberg noted the allegations have not been confirmed and that agency officials say their focus is on major wrongdoing.

Federal financial disclosures show roughly 3,600 stock trades were executed on Trump’s behalf during the first three months of 2026. Some trades appear to have occurred when he publicly mentioned companies or policy matters that could affect their shares. The White House has said the trades were executed without involvement from Trump or his family.

Seiberg said those developments are increasing pressure on Democrats to demand conflict-of-interest provisions covering the presidency before supporting the Clarity Act. He wrote, “It makes it politically hard for a Democrat to back a crypto bill unless it contains conflicts of interest standards that apply to the President.” He added Republicans may be less willing to advance the bill if doing so forces them to oppose amendments aimed at the president.

Seiberg previously estimated the practical window to pass the bill runs to the Senate’s August recess and warned that delays could push final passage into 2027, with implementing rules possibly not taking effect until 2029. Negotiators continue to weigh whether to attach conflict-of-interest or broader ethics language to the legislation or postpone action ahead of the midterm elections.