SEC Shutdown Pauses Crypto ETF Reviews Amid Regulatory Freeze

* U.S. government shutdown forces SEC to drastically limit operations. * Key regulatory activities, including crypto ETF reviews, paused amid freeze. The United States government shutdown began on October 1, 2025, after lawmakers failed to pass a funding bill. This has significantly curtailed operations at the Securities and Exchange Commission (SEC), a key federal body that oversees cryptocurrency regulations. On October 1, CoinDesk reported that the shutdown forces the SEC to operate with an "extremely limited number of staff," disrupting key regulatory processes and impacting the cryptocurrency industry. On October 1, CoinDesk reported the SEC suspended several activities due to the shutdown, including enforcement actions against crypto companies and the review of new financial products. Consequently, the halt also delays high-profile applications for exchange-traded funds (ETFs) linked to Solana, representing a notable setback for the crypto market. In its contingency plan, the SEC stated it will prioritize emergency functions to protect market integrity and investors. The agency will suspend non-essential activities, such as reviewing registration applications and non-emergency rulemaking. While electronic filing systems like EDGAR will remain operational, the SEC will not process any new applications until government funding resumes. This pause introduces uncertainty into the cryptocurrency industry, which had been anticipating regulatory decisions by mid-October, including approvals for Solana ETFs. According to CoinDesk on October 1, the shutdown coincided with a crypto market downturn. In the 24 hours before October 1, market capitalization dropped by over $140 billion, and Bitcoin and Ethereum experienced significant price declines. Until lawmakers pass appropriations legislation, the SEC’s normal operations will remain suspended, leaving the timeline for approving pending ETF applications unclear. As the shutdown continues with no immediate resolution, the crypto market faces a period of regulatory limbo and heightened uncertainty. According to CoinMarketCap, as of 19:14 UTC on October 1, Solana (SOL) was trading at $219.47, with a 5.55% increase in 24-hour trading volume.