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The US government shutdown has significantly slowed operations across various federal agencies, including the Securities and Exchange Commission (SEC), which was expected to begin the approval process for long-awaited spot crypto ETFs.
For the fourth consecutive time, spending proposals intended to reopen the government have been rejected by lawmakers from both parties, pushing the shutdown into next week.
Spot Crypto ETFs On Hold
As reported by Crypto In America, during a government shutdown, while the SEC retains the ability to act on urgent matters such as fraud and market emergencies, much of its routine work is halted.
This includes delays in processing initial public offerings (IPOs), exchange-traded funds (ETFs), and other filings, as well as pausing rulemaking efforts.
With spot crypto ETFs requiring formal approval from the SEC’s Division of Corporation Finance before they can commence trading, product launches for assets like Litecoin (LTC), Solana (SOL), and XRP are now likely on hold until government funding is restored.
However, altcoin prices saw a significant recovery on Friday, with LTC, SOL and XRP surging by 17%, 16% and 9% respectively over the past seven days. This aligns with the broader crypto market recovery, led by Bitcoin (BTC)’s surge to near record highs.
New Generic Listing Standards
“It’s like a rain delay,” Bloomberg ETF expert Eric Balchunas told Crypto In America, highlighting the frustration felt by the industry as they await clarity on the SEC’s operations. An SEC spokesperson also confirmed that the shutdown has hindered their ability to respond to press inquiries.
The current challenges follows the SEC’s decision for crypto ETF issuers to withdraw their 19b-4 filings. This, on the heels of the approval of generic listing standards that obviate the need for individual filings; as a result, crypto ETFs could potentially go effective on a rolling basis once the shutdown concludes.
The daily chart shows the total crypto market cap valuation near record highs. Source: TOTAL on TradingView.com
Featured image from DALL-E, chart from TradingView.com
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