US Government Shutdown Delays Crypto ETF

TLDR

Table of Contents

The US Senate will vote to end the shutdown, delaying key crypto market decisions.
Crypto executives from Coinbase and Kraken will discuss the market structure bill.
16 crypto ETFs are awaiting SEC approval, with delays due to the ongoing shutdown.
Canary’s Litecoin ETF, among others, faces postponed launch due to the government deadlock.

The US government is now in its third week of shutdown, with crucial discussions on the horizon that could impact the digital asset industry. As lawmakers prepare for a Senate vote scheduled for Monday evening, they will also engage in talks about the stalled crypto market structure bill, which has faced setbacks due to the shutdown.

Senate Vote to End Shutdown

The Senate is set to vote at 5:30 p.m. ET for the 11th time to end the government shutdown. If approved, federal operations would reopen, allowing for a resumption of normal government functions. If the vote fails, however, the deadlock will continue, prolonging the funding impasse.

This ongoing uncertainty is putting pressure on various sectors, including the crypto industry, which relies heavily on the Securities and Exchange Commission (SEC) for regulatory clarity and approvals.

Crypto Industry Leaders to Discuss Market Structure Bill

Meanwhile, despite the shutdown, Congress is proceeding with other important tasks. On Wednesday, Senate Democrats are expected to host a roundtable discussion with key figures from the cryptocurrency industry. Executives from Coinbase, Kraken, Circle, and Ripple will join the meeting to discuss the proposed US market-structure bill. This bill, designed to provide a comprehensive federal framework for digital assets, is seen as a crucial step forward for the industry.

The discussion will be led by Democratic Senator Kirsten Gillibrand, who has championed the bill. This meeting follows the introduction of a counter-proposal by several Democratic senators, which critics argue could harm decentralized finance (DeFi) and undermine the bipartisan support the original bill had garnered in the House. The proposed bill is viewed as the Senate’s counterpart to the House’s CLARITY Act, which received significant attention when it was introduced earlier this year.

Shutdown Delays Crypto ETF Approvals

The government shutdown has also had a notable impact on the approval of crypto exchange-traded funds (ETFs). The SEC, which oversees the approval process for these funds, is operating with limited staff, causing delays in key decisions. October was expected to be a pivotal month for the launch of several crypto ETFs, including those tracking assets like Solana, XRP, Dogecoin, and Litecoin.

The first key deadline, set for October 2, was for Canary’s proposed Litecoin ETF. Although Bloomberg analyst Eric Balchunas indicated that both the Litecoin ETF and Canary’s HBAR ETF were likely finalized, the shutdown is expected to delay their launches. As of early October, a total of 16 crypto ETFs were slated for review, with 21 additional ETF applications filed with the SEC.

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