Capitol Gridlock: U.S. Shutdown Stalls Crypto Progress, Traders Eye Delays
Day 2 of the US government shutdown and crypto markets are on edge as regulators scale back. The Securities and Exchange Commission (SEC)...
Quick overview
- The US government shutdown has halted SEC reviews and approvals for new spot crypto ETFs, delaying their launch.
- Lawmakers are still advancing legislation on digital assets, including the Responsible Financial Innovation Act and a market structure bill.
- The implementation of the GENIUS Act for stablecoin regulation is also delayed due to reduced regulatory capacity during the shutdown.
- Crypto markets are currently facing uncertainty with halted ETF approvals and ongoing legislative debates amidst the shutdown.
Day 2 of the US government shutdown and crypto markets are on edge as regulators scale back. The Securities and Exchange Commission (SEC) confirmed it won’t review or approve registration statements during the shutdown, effectively putting a hold on new spot crypto ETFs.
- Impact: ETF approvals delayed until agencies are back to full staff
- Staffing: SEC is running with an “extremely limited” workforce
- Exceptions: Only emergencies related to market stability or safety
One ETF issuer told Blockworks they had planned to list a spot product on October 6, but with the shutdown in place, those plans are on hold. This is how quickly political gridlock can impact financial innovation.
Lawmakers Move Forward on Policy
Despite the shutdown, lawmakers are moving forward on legislation to define the future of digital assets. The Senate Banking Committee is preparing a markup for the Responsible Financial Innovation Act of 2025, building on the House’s CLARITY Act which passed in July.
The Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), is finalizing its version of a market structure bill. But insiders say drafting rules for digital asset trading is proving more complicated than stablecoin legislation.
Even during the first day of the shutdown, the Senate Finance Committee held a hearing on crypto taxation. Sen. Ron Wyden called the timing a joke, while Chairman Mike Crapo said without clear tax rules, compliance and investment in the US will suffer.
GENIUS Act Delayed
The GENIUS Act passed in July established a framework for stablecoin regulation. But implementation depends on regulators who are now operating with reduced capacity during the shutdown. The law requires new licensing regimes, AML procedures and enforcement mechanisms — all of which require rulemaking from federal and state agencies.
Banks and crypto exchanges are still at odds over the provision that bans issuers from offering yields on stablecoins, while leaving room for affiliated platforms to do so. Coinbase CEO Brian Armstrong has argued for interest-bearing stablecoins, calling them equivalent to savings products.
With regulatory staff sidelined, the rollout of GENIUS Act rules will be delayed, leaving the industry in limbo.
For now, crypto markets are stuck between halted ETF approvals, ongoing legislative debates and unresolved stablecoin policy — a landscape where shutdown politics are just as powerful as market forces.
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