Washington’s long-anticipated effort to establish clear crypto regulation has hit a political wall, pushing the timeline for meaningful action potentially into the post-election landscape of next year, according to an assessment by TD Cowen’s Washington Research Group.
The Regulatory Stand-Off
The bipartisan project has devolved into a gridlock over fundamental issues: the definition of digital assets, the division of regulatory power between the SEC and CFTC, and new legal categories like “ancillary assets.”
- Republican Proposal: Drafted legislation to split jurisdiction between the SEC and CFTC and define a new class for non-security tokens.
- Democratic Counter-Proposal: A shorter, DeFi-focused bill primarily aimed at curbing illicit activity, which Republican staff quickly dismissed as unworkable.
The procedural back-and-forth has been marked by partisan friction, with lawmakers showing a clear lack of appetite to move quickly. TD Cowen analyst Jaret Seiberg suggests this isn’t a process failure but a matter of priorities, as attention shifts to the approaching midterms.
Personal Stakes Become the “Biggest Sticking Point”
Beneath the policy debate, a highly sensitive issue has complicated negotiations: conflict-of-interest rules.
A Democratic proposal seeks to ban senior officials, including the President and their families, from holding stakes in crypto companies.
This clause has intensified friction amid scrutiny of President Trump’s reported ties to digital asset ventures (like World Liberty Financial and TRUMP/MELANIA tokens), with estimates placing his family’s crypto-related earnings around $620 million.
Outlook: Delay Over Action
With the campaign season taking precedence and only a few Senate working days left, the likelihood of legislative progress this year is rapidly fading. Seiberg’s team concluded that while a deal is still technically possible within a year, “there are now far more incentives to delay than to act.”
For the crypto industry, this political stalemate means another year of regulatory uncertainty.
October 2025, Cryptoniteuae
