SEC Puts Crypto ETF Approvals On Hold Following U.S. Government Shutdown

The U.S. Securities and Exchange Commission has announced plans to streamline its operations amid the ongoing U.S. government shutdown. This has effectively put the potential crypto ETF approvals on hold until the Senate passes the funding bill to keep the government running.

Crypto ETF Approvals On Hold Until Government Shutdown Ends

The SEC, in a document outlining its operations during the government shutdown, revealed that it will not review or approve applications related to new financial products. The commission further stated that it will not review or approve self-regulatory organization rule changes, nor will it review or accelerate the effectiveness of registration statements.

This applies to the crypto ETFs, as the SEC has to approve the S-1 registration statements for these funds before they can launch. As CoinGape earlier reported, the U.S. government shut down today as the Senate was unable to pass a temporary funding bill yesterday to keep the government running.

This has led to streamlined operations for government agencies, including the SEC. Market expert Nate Geraci also noted in an X post that a prolonged government shutdown would definitely impact the launch of the new spot crypto ETFs. He added that “ETF Cryptober might be on hold for a bit.”

How A Shutdown Complicates The Approval Process

Meanwhile, it is worth mentioning that Bloomberg analyst James Seyffart had also earlier warned that a government shutdown could complicate the approval of these crypto ETFs. He also noted at the time that there was no specific timeline for when the SEC could approve these funds after the regulator asked issuers to withdraw their 19b-4 filings.

The SEC plans to approve these funds under the new generic listing standards; therefore, it is now up to the Division of Corporation Finance to give the green light. The final deadline for the Litcoin ETFs was to come up this week under the 19b-4 standard, while the Solana ETFs deadline was next week, with the deadline for the XRP ETFs coming shortly after.

However, now, it likely depends on when the government shutdown could end. Polymarket data shows that there is a 70% chance that the shutdown will last for 10 days or longer. During today’s White House Press Briefing, Press Secretary Karoline Leavitt assured that the White House was working towards ending the shutdown soon. Vice President JD Vance also remarked that he doesn’t expect the shutdown to last long.