The crypto industry in Washington is facing a crucial moment as a potential government shutdown looms on the horizon. However, experts believe that even in the event of a shutdown, the industry’s most pressing issues will continue to be addressed, although perhaps at a slower pace.
One of the industry’s top priorities is receiving answers from the U.S. Securities and Exchange Commission (SEC) regarding exchange-traded fund (ETF) applications. Additionally, progress in ongoing court cases and the development of new crypto legislation are also important concerns for the industry. Fortunately, these matters are unlikely to be completely derailed.
SEC Chair Gary Gensler has warned that the agency will operate with a limited staff during a shutdown, potentially affecting the agency’s ability to make decisions on ETF applications and resolve court cases. However, past experiences suggest that the SEC may have enough budgetary flexibility to continue functioning during a shutdown. In previous shutdowns, the SEC remained open and operational, even if on a reduced basis.
One positive outcome of a government shutdown is the temporary reprieve it provides to crypto companies that may be under investigation by the SEC. Most investigations and enforcement activities would cease during a shutdown, allowing companies to operate without the threat of regulatory action.
While the SEC’s operations may be affected by a shutdown, federal courtrooms are expected to continue functioning for a few weeks using funds collected from court fees. This means that ongoing legal battles between the SEC and crypto companies like Binance and Coinbase should proceed as scheduled, at least in the initial weeks of a shutdown. However, if the shutdown persists, court activities may experience some slowdowns.
The outcomes of these court cases are critical for the industry, especially for bankrupt companies whose investors are hoping to reclaim their funds. The resolution of these cases could have a significant impact on the future strength of the crypto industry.
In terms of legislation, a government shutdown would likely delay any progress on bills related to cryptocurrency regulation. The attention of lawmakers may shift towards other pressing issues, making it challenging for crypto-related legislation to gain momentum. Additionally, the House bills that have already passed are not expected to be supported by the Senate, further limiting progress in this area.
Overall, a government shutdown would certainly create some disruptions and delays for the crypto industry, but it is unlikely to completely halt its progress. The industry has experienced shutdowns before and has found ways to continue operating. However, if the impasse extends beyond previous records, the consequences may become more severe, affecting government employees and offices.
The crypto industry is no stranger to the occasional drama from Congress, and a government shutdown may initially go unnoticed. Nonetheless, as the shutdown persists, it will undoubtedly have far-reaching effects on the industry. The hope is that a resolution can be reached soon to avoid any significant setbacks for the crypto sector.