The US government has entered a shutdown on October 1, 2023, which could delay important positive factors for altcoins in Q4. These factors include the approval of altcoin spot ETFs and the conclusion of the investigation into Digital Asset Treasury (DAT) companies.
Hopes are high that an altcoin spot ETF, possibly the Solana ETF, will be approved as early as this month, but the prolonged government shutdown could postpone these developments indefinitely.
A delay for a waiting market
On Wednesday, the U.S. Securities and Exchange Commission (SEC) released a notice of its operations during the shutdown. The notice included a section on “Processing and Approving Filings and Registrations of Registrants and Regulated Entities.”
According to the notice, the SEC will not XEM or approve new financial product registration statements during the closure.
Expectations for an altcoin spot ETF approval are higher than ever. This is especially true since the Trump administration’s pro-crypto policies have shifted the SEC’s stance in a positive direction.
The SEC even recently authorized “common listing standards” for crypto spot ETFs. However, the government-wide shutdown makes any regulatory progress meaningless .
Previous shutdowns have seen most federal employees, except essential workers, stopped working. Crypto ETF approval does not fall under essential services.
This means approval of the Solana ETF , which was expected as early as next week, could be delayed. Industry observers have predicted that ETFs from several asset managers could launch this week or next, including Grayscale and Canary .
“It looks like the extended government shutdown will definitely impact the launch of new spot crypto ETFs. The Cryptober ETF may be delayed a bit,” Nate Geraci, President of NovaDiusWealth, said on his X account.
Investigation suspended
The government shutdown is also likely to delay the ongoing FINRA investigation into more than 200 DAT firms , which has been a major source of pressure for the industry.
The investigation was initiated due to concerns that the companies' stock prices and volume had spiked, which came before they announced plans to acquire Cryptoasset.
The joint investigation by the SEC and FINRA is XEM into possible insider trading or violations of Regulation Fair Disclosure (Reg FD).
While FINRA will maintain core investor protection functions during the government shutdown, non-essential services may be suspended or reduced, which will undoubtedly impact the progress of the investigation.
As a result, regulatory oversight of DAT companies may be delayed or rescheduled.
