TLDR
- US government shutdown continues with no Congressional funding agreement as of Monday
- SEC operating with skeleton staff, unable to process crypto ETF applications or policy changes
- CFTC restricted to one acting commissioner with limited operational capacity
- Prediction markets suggest shutdown could exceed 15 days based on current betting trends
- Federal Reserve, OCC, and FDIC become primary crypto regulators during shutdown period
The US government shutdown that started September 30 has entered its second week with no resolution in sight. Federal agencies including the Securities and Exchange Commission and Commodity Futures Trading Commission remain in limited operational mode.
Congressional lawmakers failed to pass a stopgap funding measure before the deadline. The Senate planned a vote on a continuing resolution for Monday at 5:30 pm ET, but passage remained uncertain at press time.
The budget impasse revolves around healthcare spending. Democratic lawmakers insist any funding bill must reverse cuts implemented in a July budget measure before they will support it.
SEC Crypto Work Comes to Standstill
The Securities and Exchange Commission announced it would function under modified conditions with minimal staff available. Only emergency situations will receive attention during the funding lapse.
This operational freeze directly impacts pending crypto exchange-traded fund applications. Multiple ETF proposals were positioned for imminent approval before the shutdown began.
The agency had also been working on exemptive relief for new crypto products. Digital asset companies seeking approval for tokenized equities offerings now face indefinite delays.
TD Cowen’s Washington Research Group released analysis stating the SEC cannot resume crypto policy work until funding is restored. Jaret Seiberg noted the delays extend beyond the shutdown duration itself.
“Staff will need time to resume projects after returning to work,” Seiberg explained. “They will also need to address urgent matters that accumulated during the closure.”
The CFTC faces similar constraints. The agency currently operates with just one commissioner in an acting chair role and reduced staffing levels.
President Donald Trump cannot nominate new CFTC commissioners while the shutdown continues. The Senate also cannot advance legislation for digital asset market structure during this period.
Industry Response and Duration Predictions
Przemysław Kral, CEO of Zondacrypto, warned the shutdown could harm the crypto sector. He pointed to the SEC and CFTC’s importance in global digital asset markets.
“Reduced operational capacity risks stalling innovation and decreasing investor confidence,” Kral stated. He referenced the region’s existing challenges with crypto regulation.Prediction markets indicate users expect an extended shutdown. Kalshi showed 69% probability for duration exceeding 15 days and 41% chance of surpassing 25 days.
Polymarket data revealed 24% odds the current shutdown becomes the longest in US history. However, 72% of users predicted it would conclude after October 15.
The longest previous shutdown lasted 35 days during Trump’s first term. That 2018-2019 closure centered on border wall funding disputes.
Alternative Regulatory Pathways
With the SEC effectively offline, crypto oversight shifts to other financial regulators. The Federal Reserve, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation can maintain operations during shutdowns.
These agencies will handle bank-related crypto matters. This includes stablecoin issuance, crypto asset custody services, and tokenization-based payment systems.
The White House withdrew Brian Quintenz’s nomination for CFTC chair last week. Reports indicated opposition from Gemini founders Cameron and Tyler Winklevoss, both Trump campaign donors.
