The US government shutdown entered day one on Wednesday. The SEC began winding down operations after Congress failed to pass a funding bill. Most agency staff started shutdown procedures.
The SEC said it is following an August operations plan. It warned of an “extremely limited number of staff” during the lapse. Many systems would run “under modified conditions.”
“On the first workday of a lapse in appropriations, non-excepted staff will engage in activities to shut down their respective operations… and prepare for the rapid restart of operations when funding is renewed,”
the agency said. The notice was posted on X about nine hours after the funding bill failed.
SEC operations: what continues and what pauses in the shutdown
Under the plan, the SEC continues only excepted work. That includes emergencies and matters that protect property. Routine activities pause until funding returns.
The agency said it will not engage in ongoing litigation, except for emergency cases. This affects civil actions against crypto firms unless a case meets the exception. New non-urgent filings are unlikely to move forward.
The plan also pauses non-emergency rulemaking and supervision of self-regulatory organizations. The SEC will not provide non-emergency assistance to foreign regulators. Staff will secure systems and prepare for a fast restart once appropriations pass.
Crypto ETF applications: reviews likely paused at the SEC
The SEC said it cannot review registration applications during the shutdown. That includes crypto ETF applications awaiting decisions. However, the electronic filing system remains open to accept submissions.
Several Solana ETF proposals are pending. Analysts had expected decisions by mid-October. That timeline now faces delay if reviews cannot proceed under the funding lapse.
Enforcement tied to crypto also narrows. Non-emergency SEC enforcement steps pause, while emergency actions can still occur. Firms may file electronically, but they should not expect review activity until funding resumes.
SEC enforcement and litigation: scope under a funding lapse
SEC litigation continues only when necessary to prevent harm to investors or property. Non-emergency hearings and filings are postponed. Courts may grant pauses or adjusted schedules.
Routine SEC enforcement work, including investigations, slows significantly. Staff availability is restricted to excepted roles. Communications respond only where emergencies exist.
Whistleblower processing, examinations, and routine market oversight see delays. The agency’s public statements emphasize temporary status. Normal operations resume on the “next regularly scheduled workday” after appropriations are enacted.
Congress impasse: no end in sight to the US government shutdown
Negotiations showed no clear path on Wednesday. There was no reported deal between Republicans and Democrats on a stopgap bill. Positions remained firm on funding priorities.
Mike Johnson, Speaker of the House, said the chamber returns next week. He signaled Republicans would hold to their bill. Democrats continue to seek changes, including health-care items tied to a July budget law.
Until a compromise emerges, agencies operate under contingency plans. The SEC operations plan governs staff returns. Employees come back on the next workday after Congress restores funding.