Prolonged Deadlock Halts Federal Operations
The US government shutdown has entered its second week, with no agreement yet reached between Republican and Democratic lawmakers to restore federal funding. Thousands of federal employees remain furloughed or working without pay, while key financial agencies — including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — continue to operate with restricted staff and limited capacity.
On prediction platforms such as Kalshi and Polymarket, users are betting that the shutdown could last beyond 15 days, though it is unlikely to surpass the 35-day record set during Donald Trump’s previous term.
Regulatory Slowdown Hits Financial and Crypto Sectors
The SEC confirmed it is functioning “under modified conditions” with a significantly reduced number of staff until Congress passes a funding bill. This limitation is expected to delay the review of crypto exchange-traded fund (ETF) applications and other regulatory actions tied to the digital asset sector. Similarly, the CFTC, currently under acting leadership, is facing operational challenges with minimal personnel available to oversee commodity and futures markets.
“The US 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. He added that reduced regulatory capacity could stall innovation and shake investor confidence, especially as the US strives to catch up with evolving crypto regulations worldwide.
Political Standoff and Legislative Delays
At the center of the dispute is a budget standoff tied to healthcare funding. Democrats are pushing for a reversal of earlier spending cuts, while Republicans seek to maintain stricter fiscal limits. The Senate was set to vote on a continuing resolution to fund the government, but it remains uncertain whether it has the necessary support to pass.
Until the shutdown ends, it is unlikely that the Senate will address digital asset market legislation, nor will the White House move forward with pending nominations for regulatory agencies. The withdrawal of Brian Quintenz’s nomination as CFTC chair last week has further slowed progress.
The prolonged funding crisis not only affects federal operations but also underscores the growing tension between political priorities and economic stability in the world’s largest economy.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.