The US Securities and Exchange Commission (SEC) is making preparations for a potential federal government shutdown, according to a notice posted on its website. In the event of a shutdown, the SEC’s operating status will change in line with the rest of the federal government, with a focus on maintaining market integrity and protecting investors. While some operations, such as the EDGAR database system for tracking government filings, will continue as usual, routine reviews like ETF applications may be put on hold. However, the SEC will still be able to take action against fraud and market manipulation to ensure enforcement is not completely absent.
The potential government shutdown comes as a result of the House of Representatives’ failure to vote on a bipartisan government funding bill, increasing the likelihood of a shutdown. As Congress struggles to find a solution, essential services like emergency services and food aid programs may be affected, and non-essential federal employees may not be paid during the holiday season. In response to this uncertainty, the Digital Chamber of Commerce has called on the SEC to reconsider its approach to digital assets, suggesting that the incoming Trump administration may be more receptive to cryptocurrencies.
The Digital Chamber of Commerce has met with SEC commissioners to discuss its 2025 Digital Asset Policy Priorities, proposing a reset in the relationship between the SEC and digital assets. The organization believes that the new administration under Donald Trump may offer a more favorable regulatory stance towards cryptocurrencies compared to the current SEC Chair Gary Gensler. The Chamber has criticized Gensler for his enforcement-focused approach and believes that regulatory guidance like SAB121 is inadequate and unfavorable to the industry. With Gensler announcing his resignation, Paul Atkins is expected to succeed him as the SEC Chair in early 2025.
As the SEC prepares for a potential shutdown and the incoming administration under Donald Trump, the future of cryptocurrency regulation remains uncertain. The Digital Chamber of Commerce is advocating for a reset in the relationship with the SEC and a more positive regulatory stance towards digital assets. With the SEC continuing to focus on market integrity and investor protection during a potential shutdown, the enforcement of fraud and market manipulation will not come to a complete halt. However, routine reviews and processes may be affected, leading to delays in certain operations. As Congress grapples with funding issues, the impact of a potential government shutdown on essential services and federal employees remains a concern.
