US Government Shutdown Enters 4th Week, Affecting Crypto Along The Way
The US is currently experiencing the longest government shutdown in its entire existence so far, and the effects are starting to show on numerous industries, including cryptocurrencies.
The shutdown has already entered its fourth week, with the SEC and CFTC being prevented from making important decisions that might affect the future of digital coins.
Effects of the government shutdown on crypto
One of these decisions concerns the Bitcoin futures trading platform called Bakkt, created by Intercontinental Exchange. The platform's arrival, which was scheduled for December 22nd, 2018, ended up being delayed by a month, with the new launch date being January 24th, 2019.
However, with all that is happening at the moment, another delay is almost surely inevitable, and many believe that it is only a matter of time before it is officially announced.
Kelly Loeffler, the CEO of Bakkt, stated that the exchange has already made great progress and that it currently awaits for regulators' approval before it goes live. Bakkt is also not the only one stuck in this situation, and other trading platforms such as ErisX are currently waiting for the regulators to give “green light” before they can proceed.
Another decision that will certainly be affected by the current situation revolves around the potential approval of Bitcoin ETFs, which was already delayed in the past, as well. Bitcoin ETFs (Exchange Traded Funds) are one of the most highly anticipated crypto products, and many were hoping to see them approved in late 2018. However, the US SEC, which has previously rejected all such approval requests, has postponed the decision until February 27th, 2019.
The proposal that is currently waiting for the SEC to make a decision was filed last year by VanEck, SolidX, and CBOE. While the SEC does have the ability to decide in favor or against the proposal under regular circumstances, the government shutdown might unintentionally bring the approval of the proposal, due to existing laws.
The law in question can be found under Title 15 of the U.S. Code, which states that all proposals will be considered approved if the SEC is unable to make a decision.
Considering how highly anticipated the decision is, many would be glad to see the application approved, even if it is by default. However, legal experts believe that such an outcome is unlikely and that those who remain on duty will likely reject the application to prevent the approved-by-default situation. Considering this, it is not likely that the SEC is going to make a positive decision. However, there is still time before the deadline, and anything can happen in the following weeks.
The lack of regulatory clearance persists in 2019
Regulations are an important part of the crypto world, as they are digital currencies' only hope of reaching some form of stability and safety.
However, while numerous countries have attempted to bring their own regulations, only a few of them have had some success in doing so. As for the US, the situation remains unchanged, and the lack of any official guidance significantly affects the safety of handling digital assets.
Once again, all potential regulations and guidances that regulators may have created will get postponed due to the current situation. As a result, the entire crypto space is prevented from moving forward and will remain to do so at least for as long as the shutdown is in effect. Experts say that even if the SEC could return to the normal way of handling things right now, it would still take time for them to catch up on recent developments that were missed during the previous weeks.
All of this affects the crypto space in a very negative way, and the industry is shifting its focus on Capitol Hill due to the fact that the lawmakers continue to operate even under these circumstances. While the crypto industry aims to stay in good relations with regulators and lawmakers alike, the shutdown is significantly limiting these efforts.
The crypto space continues to be pressed by numerous concerns, such as taxes, the lack of official guidance, exchange and ETF approvals, and more. For now, there are no signs that anything will change in the near future, which might bring crypto advancement to a halt or even cause considerable setbacks.