Many US federal employees have been furloughed, and others continue to work without pay, since lawmakers failed to pass a stopgap measure to fund the government last week, and the shutdown is expected to continue.
As of Monday morning, there had been no reported deal between Republican and Democratic members of the US Congress to stop the shutdown and return operations to normal, including activities at financial regulatory agencies such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
The Senate is scheduled to hold a vote on a continuing resolution to fund the government at 5:30 pm ET, but at the time of publication, it was unclear whether the measure would have enough support to pass.
The crux of Democrats’ position in the budget standoff is healthcare, with lawmakers demanding that any spending bill include a reversal of cuts from a July budget measure.
Regarding the impact on the digital asset industry, the SEC said that it would operate “under modified conditions” within an “extremely limited number of staff” until a funding bill is passed, restricting its ability to review crypto exchange-traded fund applications. The CFTC, with only one commissioner who is currently serving as acting chair, is also operating with restrictions and limited staff.
“The US government shutdown […] can damage the crypto industry by disrupting the SEC and CFTC, which are vital to global digital asset markets,” Przemysław Kral, CEO of crypto exchange Zondacrypto, said in a statement shared with Cointelegraph.
“While the immediate impact might seem contained, their reduced operational capacity risks stalling innovation and reducing investor confidence, particularly in a region already playing catch-up with crypto regulation,” Kral said.
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Until the government returns to normal operations, it is unlikely that the Senate will be able to consider a bill to establish a digital asset market structure, nor would US President Donald Trump nominate replacements for CFTC commissioners.
The White House withdrew the nomination of Brian Quintenz as CFTC chair last week amid reported pushback from Gemini co-founders Cameron and Tyler Winklevoss, both Trump donors and supporters.
Crypto users are betting on a prolonged shutdown
A variety of bets on platforms like Kalshi and Polymarket show that many users are predicting a long — but not historically long — shutdown. Trump holds the record for a 35-day government shutdown during his first term, over his push to build a US-Mexico border wall.
On Kalshi, a bet on the length of the shutdown predicted a 69% chance of it lasting more than 15 days, with 41% for more than 25 days. Polymarket gave users a 24% chance at the time of publication that the current shutdown would be the longest in US history, but a 72% chance that it would end after Oct. 15.
The shutdown entered its sixth day after funding lapsed at midnight on Sept. 30.
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