The United States government has entered its 37th day of shutdown, making it the longest in American history and surpassing the 35-day record from 2018–2019.
What began as a budget standoff over Affordable Care Act subsidies and spending cuts has now evolved into a crisis affecting every corner of the federal system, including the cryptocurrency sector, which was on the cusp of major regulatory breakthroughs.
For digital assets, the shutdown couldn’t have come at a worse time. After a year of momentum driven by the GENIUS Act, pending crypto legislation, and several landmark ETF applications, the freeze has effectively halted progress across all key agencies.
A Regulatory Blackout: SEC and CFTC Stalled
The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), the two bodies at the heart of crypto oversight, are now operating with less than 6% of their staff. That means no new approvals, no rulemaking, and no enforcement actions.
For crypto firms, this translates into uncertainty at a time when regulatory clarity was finally within reach.
Projects awaiting SEC green lights, companies preparing token filings, and exchanges seeking spot-trading permissions are now frozen in place.
According to one Washington-based analyst, “It’s not just a pause, it’s a regulatory blackout. The entire U.S. crypto rulebook is on hold.”
Bills and Approvals on Ice: The Roadblock to Reform
Several landmark crypto initiatives are now stuck in limbo:
1. The CLARITY Act
The CLARITY Act, passed by the House in July 2025, was designed to divide crypto oversight between the SEC and CFTC, a long-awaited structural reform. The Senate had been expected to finalise the bill before the year’s end, but the shutdown has brought discussions to a standstill.
Prediction markets now place the odds of 2025 passage at just 25%, pushing likely approval into 2026.
2. Altcoin ETFs Frozen
The SEC was poised to approve up to 16 spot altcoin ETFs, including those tracking Solana (SOL) and XRP, in what was expected to be the next major step after Bitcoin and Ethereum ETFs. Now, those approvals are stalled. With the SEC’s Corporation Finance division furloughed, filings cannot move forward.
If operations resume soon, approvals could arrive by November, but a longer shutdown could delay them until 2026.
3. CFTC’s Spot Crypto Rules
The CFTC’s framework for spot crypto trading and tokenised collateral, revealed in August, was set to establish how crypto could be traded like traditional commodities. That plan, too, is now paused, undermining hopes for a regulated U.S. crypto market by 2025.
4. GENIUS Act Rollout
The GENIUS Act, a stablecoin-focused law signed in July, was billed as the first true federal crypto framework. However, the Treasury, OCC, FDIC, and FinCEN, all key players in its implementation, are running at minimal capacity. Its rollout, initially expected in mid-2026, has now been pushed to early 2027.
Project Crypto and the Silence from the SEC
Before the shutdown, SEC Chairman Paul Atkins had introduced Project Crypto, a sweeping reform to modernise securities laws and integrate blockchain assets into mainstream finance. The initiative promised regulatory pathways for crypto 401(k) plans, leveraged ETFs, and innovation exemptions for blockchain startups.
Now, all of that has been shelved. Even the rollback of SAB 121, an accounting rule that discouraged banks from offering crypto custody, is incomplete. As a result, traditional financial institutions eager to enter the crypto space are left without regulatory guidance.
The Bigger Picture: America Falling Behind
The implications of the shutdown extend well beyond Washington. While the U.S. grapples with political gridlock, global competitors are accelerating.
Regions like Hong Kong, the European Union, and the UAE continue to strengthen their crypto frameworks, positioning themselves as leaders in digital finance. The U.S., by contrast, risks losing both innovation and investment to these markets.
Even the White House’s Digital Assets Council, which had been exploring Bitcoin reserve strategies and DeFi regulation, has gone silent. With key staff furloughed, even informal discussions have stopped.
If the shutdown ends in the coming weeks, analysts predict a post-crisis surge of delayed actions, from ETF approvals to executive orders, potentially before Thanksgiving. However, if the stalemate stretches into December, 2026 may become a year of catch-up rather than progress for U.S. crypto policy.
