TD Cowen’s Washington analyst Jaret Seiberg wrote to Bitcoin Magazine that a Democratic sweep of both chambers in the November 2026 election would likely sink the CLARITY Act for the next two years, creating a less favorable regulatory environment for crypto assets.

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Legislative outlook for the CLARITY Act

The CLARITY Act, a market‑structure bill that passed the House 294‑134 in July 2025 but failed a Senate cloture vote 49‑50 on Sept. 15, must be reintroduced if it does not clear Congress before the new session begins on Jan. 3, according to Seiberg. He notes that a Democratic majority in the Senate could block any further progress, effectively killing the proposal for at least two years.

Potential shifts in agency leadership

Seiberg argues that Senate control would allow Democrats to influence key regulatory bodies— the FDIC, SEC and CFTC—by forcing the appointment of Democratic‑aligned members. He also suggests that the White House could face pressure to drop its effort to appoint Lisa Cook to the Federal Reserve board. In contrast, a Republican‑led Senate would likely maintain the current trajectory of easing capital, liquidity and tiering rules for banks.

Key congressional figures and policy focus

If Democrats take the House, Rep. Maxine Waters is expected to chair the Financial Services Committee, emphasizing housing policy and tighter scrutiny of the FHFA. In the Senate, Sen. Elizabeth Warren could become chair of the Banking Committee, opening the door for populist measures such as interest‑rate caps and limits on bank buybacks. Seiberg notes that while Warren and President Trump might find common ground on some issues, the overall environment would remain hostile to crypto initiatives.

What to watch next

Market participants should monitor the lame‑duck session for any last‑minute attempt to pass the CLARITY Act before Jan. 3, as well as the composition of the FDIC, SEC and CFTC once the new Congress convenes. Additionally, prediction markets on Kalshi continue to show a high probability of Democratic control, which could shape crypto‑related legislation and regulatory actions throughout 2027.