Shutdown Blues slows down cryptographic work

As the US government shutdown enters its second day, the crypto industry is wondering how the closure will affect pending regulatory issues.

Currently, Limbo: Crypto Market Structure Bill, Genius Law Status, and a timeline for approving a specific spot Crypto ETF.

Spot Crypto ETF

Perhaps the most direct impact of government shutdowns on the crypto industry is the delay in new spot crypto ETFs.

The Securities and Exchange Commission said during the closure that staff will not review or approve the registration statement or issue a notice of validity.

A “very limited number” of SEC staff will be monitoring emergency email addresses and telephone lines for each committee department, the guidance added. “Emergency” is an immediate threat to market stability, personal safety, or property protection.

One Crypto ETF publisher told Blockworks that he was confident in his list for Monday, October 6th before the closure.

But now things are in the air.

Crypto Market Structure Legislation

Despite the closure, members of the Senate Banking Committee are planning to tackle a planned market structure bill for markup, according to those familiar with the matter.

Lawmakers originally wanted to hold a markup hearing for the 2025 Responsible Financial Innovation Act at the end of September, BlockWorks previously reported, but this timeline was delayed as they failed to pass the expenditure bill.

In September, Republicans on the Senate Banking Committee completed the draft bill, expanding the House Clarity Act, which was passed in July.

The industry is still waiting for the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission, to release a version of the Market Structure Bill.

Those familiar with the issue said ahead of the closure that the Agriculture Commission’s draft was “close” but that the market structure law has proven to be more complicated than Stablecoin’s rules.

If the Senate Banking Committee moves forward with central monitoring of market structure bills, they are not the only committees that are moving forward into crypto business as planned.

On Wednesday, in the first hours of the closure, the Senate Treasury Committee held a hearing on crypto tax policy.

In his opening remarks, ranking member Sen. Ron Wyden said that cryptocurrency taxation is an important issue necessary to be “right,” but holding a hearing yesterday showed a “distorted sense of priorities.”

Senate Finance Committee Chairman Mike Krapo said budget debate continues, but tax law updates should be a major concern for lawmakers.

“Without clear tax rules, taxpayers are left with many unanswered questions, and individuals, businesses and our country’s finances are burdened,” Crapo says. “The prolonged tax uncertainty makes the US less attractive to business and invest in, and hurts tax compliance.

Genius act

After all, the stubcoin law may not be as simple as lawmakers initially believed.

Genius acts became law in July, but that was only step one. The bill laid out a general framework, but now delegates responsibility to federal and state regulators who are tasked with creating and issuing new rules. These include licensing requirements, enforcement processes, AML procedures, and more.

It’s going to take a long time, and we knew it before the shutdown, but designing a Stablecoin policy is not a top priority for agents currently operating with the skeleton crew.

Furthermore, when President Trump signed the act of genius, lobbying over the stubcoin laws did not cease. According to familiar people, large banks and crypto companies are almost exchanging — most of the exchanges — remain at odds over the rules surrounding Stablecoin yields, with both sides preparing for a expensive battle.

The Genius Act provides that Stablecoin issuers cannot provide yields or benefits to their holdings. This prohibits the issue from offering yields directly, but does not block exchanges or “affiliates.”

Banks were not satisfied with the language, but the crypto industry, especially Coinbase.

In March, when negotiations for the Genius Act were ongoing, Coinbase CEO Brian Armstrong stressed the need to allow Stablecoins’ interest payments. “We can choose to level the arena and ensure that in the same way these laws allow savings or checking accounts, all regulated stylizations are directly available to consumers,” Armstrong writes. post x.