US SEC and CFTC operations to resume after 43-day government shutdown

Employees furloughed during the U.S. government shutdown will return to work at the Securities and Exchange Commission and the Commodity Futures Trading Commission after 43 days of leave.

The staff is scheduled to return Thursday after President Donald Trump signed a funding bill late Wednesday to restart federal operations, according to the SEC’s work plan with the CFTC.

The agencies’ respective plans require employees to report to work on the “next regular workday following enactment of the appropriations law (…),” something CFTC Acting Chair Caroline Pham seemed to acknowledge in a Thursday post.

sauce: Caroline D. Pham

Amid the government shutdown, both agencies have reduced staffing and scaled back operations. For the SEC, this has limited its ability to review exchange-traded fund applications, including those related to virtual currencies. The CFTC’s plan calls for it to “suspend the majority of its operations,” including enforcement, market surveillance, and regulatory rulemaking efforts.

However, as government agencies reopen, the SEC and CFTC may take some time to resume activities such as reviewing registration applications filed in the past 43 days. Amid reports that the shutdown is likely to end soon, some companies have filed for IPOs and ETFs.

“I think some companies took the position that they could just submit[an SEC application]knowing it wouldn’t be reviewed until it came back, but at least they’re in the queue,” Jay Dubow, a partner at law firm Troutman Pepper Lock, told Cointelegraph.

He also warned of the potential impact of repeated SEC shutdowns.

“Every time you go through something like this, there’s a risk that things can slip through the cracks in different ways.”

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During the shutdown, officials from both financial regulators regularly spoke at meetings about their approaches to cryptocurrencies, sometimes commenting on the availability of cryptocurrencies and the reduction of operations.

On October 7, less than a week after the appropriations expired, SEC Chairman Paul Atkins said, “We are clearly still functioning within the limits.” “There are restrictions on what you can and cannot do, especially for the staff (…) I can still come and do things like this (referring to conferences).”

Before the funding bill is resolved, Akins said the SEC will consider in the coming months “establishing a token taxonomy” that is “anchored” in the Howie test to recognize that “investment agreements may be terminated.” Pham similarly noted that the CFTC sought approval for leveraged spot crypto trading in December.

CFTC chair candidate scheduled for Senate hearing

Michael Selig, chief counsel of the SEC’s Cryptocurrency Task Force, is scheduled to appear before the Senate Agriculture Committee on Wednesday as part of Mr. Trump’s push to have him confirmed as the next CFTC chairman. The hearing likely would have proceeded during the shutdown, but had it been approved, Selig’s authority over the agency would have been significantly limited.

If the Senate confirms Selig, Pham is expected to step down as acting speaker. But even if he were to take office quickly, the CFTC would still face a leadership gap, with only one of the five commissioners normally approved by the Senate.

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