The biggest remaining obstacle to passing comprehensive U.S. crypto market structure legislation is not the core regulatory framework, whether digital assets are securities (SEC) or commodities (CFTC), but a partisan fight over conflict-of-interest provisions, according to a February 17, 2026, note from TD Cowen’s Washington Research Group.
Democrats are demanding a broad ban preventing senior government officials and their families from owning or transacting in crypto businesses. This demand directly implicates President Trump and his family, given:
Republicans view the proposal as unacceptable, believing Trump would veto any bill requiring his family to divest holdings. The deadlock has stalled progress despite bipartisan negotiations on the underlying structure.
TD Cowen analyst Jaret Seiberg outlined a potential breakthrough:
Why Democrats might accept this trade-off:
Seiberg believes this compromise could unstick negotiations and allow the CLARITY Act (or a similar market structure bill) to become law in 2026.
Passage would provide long-sought regulatory clarity, potentially unlocking billions in institutional capital and U.S.-based blockchain development. Failure to resolve the conflict-of-interest impasse could delay legislation into 2027 or beyond.
Current market snapshot (February 18, 2026):
