The US SEC Is Preparing For A Government Shutdown

The United States federal government is preparing for a shutdown, and the exercise will likely impact the Securities and Exchange Commission (SEC).

Noteworthy, the partial government shutdown was attributed to a lapse in appropriations.

The Threat of Federal Government Shutdown

President-elect Donald Trump rejected a bipartisan deal on federal spending. He then demanded that lawmakers address the nation’s debt ceiling before he takes office next month.

This Bipartisan bill would keep the government funded past the deadline of midnight on Friday.

However, Trump mentioned that there would be dire consequences for any Republican lawmaker who votes for the bipartisan deal.

Supporters will face primary challenges within their party in the midterm elections in 2026. Trump wrote on his Truth Social platform,

“Any Republican that would be so stupid as to do this should, and will, be Primaried.”

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Since Trump voiced the threat, House of Representatives Speaker Mike Johnson and the rest of his leadership team have been trying to create a new compromise bill.

He hopes to win the support of his colleagues in the House with a 219-211 majority. They then hope to the Senate, where Democrats hold a 51-49 majority.

An action by the US Congress would see the commencement of the partial shutdown if the lawmakers fail to make a compromise.

In the case of a shutdown, government workers will not receive their salaries. In addition, there may also be no food assistance program.

What This Government Shutdown Means for the US SEC

The SEC is preparing for any eventuality, whether the partial government shutdown happens or not.

Should there be a shutdown, the agency will prioritize crucial functions like market integrity and investor protection.

Also, the SEC confirmed that its internal EDGAR database system for tracking government filings will remain operational.

Notably, the Commission can still prosecute fraud and market manipulation-related cases. Affected activities will include non-essential operations such as routine reviews of various filings, including ETF applications.

The SEC would also be unable to conduct inspections or respond to inquiries. Within the period the government shutdown might be in place, the SEC may not respond to due crypto ETF updates.

It is worth noting that other regulatory agencies like the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), funded independently of congressional appropriation, will remain in service.

Is the Government Shutdown Impacting the Crypto Market?

The crypto market might face some volatility due to the absence of regulatory oversight. The weakened enforcement of laws could fuel the presence of scams and cyber attacks on the burgeoning sector.

Market integrity and investor protection could face battery when the government resumes all operations.

Following the news of the potential partial government shutdown, the crypto market has seen some shake-up.

Several crypto assets, including Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), have recorded huge price dips.

From trading at around $104,000, BTC has dropped to $96,522.38 in 24 hours per market data.

This plunge corresponds with a 5.73% drop in under 24 hours. ETH is trading at $3,511.62 after losing 9.85% of its profit and Solana is down 13% to $196.

Overall, more than $1.1 billion has left the market per liquidation.