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US Shutdown Hampers SEC, CFTC Operations; Crypto Bets on Duration

U.S. Government Shutdown Disrupts SEC and CFTC Operations, Threatening Crypto Oversight and Innovation

  • Many U.S. federal employees are either furloughed or working without pay as the government shutdown continues.
  • There is no agreement between Republican and Democratic lawmakers to end the shutdown, and financial regulatory agencies like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are operating with limited staff.
  • The Senate plans to vote on a continuing resolution, but support for passage is uncertain.
  • The shutdown is restricting oversight of crypto exchange-traded fund applications and slowing digital asset innovation in the U.S.
  • Online prediction markets indicate users expect a relatively long shutdown, but not the longest in U.S. history.

The U.S. government shutdown entered its sixth day after lawmakers failed to approve a stopgap funding bill, leaving many federal employees furloughed or working without pay. The lack of agreement in Congress affects all federal agencies, including the SEC and CFTC, which play key roles in regulating financial and digital asset markets.

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As of Monday morning, Congress had not reached a deal to reopen the government or restore full operations for agencies such as the SEC and CFTC. The Senate is scheduled to hold a vote on a continuing resolution at 5:30 p.m. Eastern Time, but it remains uncertain if the measure will pass and end the shutdown.

The budget dispute centers on healthcare funding, with Democrats demanding a reversal of cuts made in a July measure. During the shutdown, both the SEC and CFTC are working with reduced staff. The SEC stated it is operating under “modified conditions” and can only review a limited number of crypto exchange-traded fund applications. The CFTC, with only one commissioner acting as chair, also faces serious staffing restrictions.

“The U.S. government shutdown […] can damage the crypto industry by disrupting the SEC and CFTC, which are vital to global digital asset markets,” said Przemysław Kral, CEO of crypto exchange Zondacrypto. Kral added that the situation may stunt innovation and lower investor confidence, especially given the slower pace of U.S. crypto regulation. Until the Senate restores normal operations, progress on digital asset legislation and key appointments is unlikely. Last week, the White House withdrew the nomination of Brian Quintenz as CFTC chair amid opposition from Gemini co-founders Cameron and Tyler Winklevoss.

Prediction markets, including Kalshi and Polymarket, show users betting on the shutdown lasting more than 15 days, but with a low probability of breaking the previous record of 35 days set during former President Donald Trump‘s term. Polymarket gives a 72% chance of the government reopening after October 15, with only a 24% chance of becoming the longest shutdown on record.

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