The potential U.S. government shutdown has raised concerns about delays in the approval of spot cryptocurrency exchange-traded funds (ETFs), according to legal expert Bill Morgan and Fox Business journalist Eleanor Terrett. Spot crypto ETFs, such as those for Litecoin (LTC), Solana (SOL), and XRP, are regulated under the Securities Act of 1933 and require active approval from the U.S. Securities and Exchange Commission (SEC) before launching. In contrast, ETFs like the Teucrium XRP ETF, which holds Treasuries, cash, and swap receivables instead of direct crypto assets, are registered under the Investment Company Act of 1940 and can automatically go into effect after a statutory waiting period without SEC intervention.
Morgan explained that the SEC's Division of Corporation Finance, responsible for reviewing ETF filings, would likely reduce operations during a shutdown, potentially stalling approvals. He remained cautiously optimistic, suggesting that if the government reopens soon, approvals for some crypto ETFs could still occur in late October, but acknowledged the unpredictability, stating, "Crypto never fails to surprise." Terrett clarified misconceptions on social media that an XRP spot ETF was automatically approved, emphasizing that only non-spot ETFs under the 1940 Act avoid direct SEC oversight. Community reactions were mixed, with some expressing long-term optimism for assets like XRP, while others voiced frustration over regulatory delays.
The shutdown's impact hinges on its duration; if prolonged, it could push back the timeline for spot crypto ETF approvals, leaving investors and companies in limbo. Industry stakeholders are monitoring the situation closely for updates from the SEC, highlighting the challenges of integrating crypto into traditional financial markets amid regulatory uncertainty.
BTC
MIM