TD Cowen urges realistic expectations for crypto legislation passage

Investment bank TD Cowen called for more realistic expectations regarding the passage of crypto legislation in the next year.

There is an increased risk of political gridlock regarding cryptocurrency market structure bill FIT21 and the Senate Agriculture Committee bill, said TD Cowen Managing Director of the Washington Research Group, Financial Services Jaret Seiberg. 

"We view optimism as misplaced as we believe prospects are dropping for votes this year on either bill. And there is a growing risk the bills could get stuck politically next year," said Seiberg in a research note Monday, adding, "We also are skeptical about next year regardless of the election. It is because both parties will want to extract more contributions before they finally deliver for industry."

Seiberg noted that this may happen despite the crypto community "aggressively making political contributions." He cited a recent report by the nonprofit organization Public Citizen that showed $119 million — about 48% of corporate political contributions — were given by crypto companies this year, with the crypto-focused Fairshake PAC also raking in $95 million in contributions. 

In May 2022, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21), which attempts to regulate the cryptocurrency industry broadly and would allow the Commodity Futures Trading Commission over crypto assets, The Block previously reported.