Return to Work After Government Shutdown
After a 43-day hiatus caused by the US government shutdown, employees of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are gearing up to return to their posts. Their reinstatement comes in the wake of President Donald Trump’s approval of a funding bill late Wednesday night, which effectively ended the shutdown and restored federal operations.
Operational Resumption
As per the operational protocols established by both agencies, staff are to report back to work on Thursday, marking the first regular workday following the passage of the appropriations legislation. This was confirmed by Caroline Pham, the acting chair of the CFTC, in a post on X.
During the closure, both agencies faced diminished staffing, which significantly hampered their operational capabilities. The SEC, for instance, was unable to process applications for exchange-traded funds (ETFs), including those associated with cryptocurrencies. The CFTC specifically suspended most of its activities, halting enforcement, market oversight, and regulatory rulemaking efforts.
Addressing the Backlog
With the government reopening, these agencies will require some time to address the backlog of work that accumulated during the shutdown, including a variety of registration applications that were filed while many operations were idle. Certain companies, anticipating the reopening, submitted applications for initial public offerings (IPOs) and ETFs during this period, as they sought to ensure their requests entered the queue for review.
“Some companies might have felt secure enough to file with the SEC, rationalizing that their applications would only be examined once the government resumed operations,” remarked Jay Dubow, a partner at Troutman Pepper Locke, speaking to Cointelegraph.
He cautioned, however, about the potential risks if future shutdowns occur, noting that processes could become less efficient as critical tasks might be overlooked.
Agency Leaders During the Shutdown
Despite these challenges, agency leaders remained active during the shutdown, participating in conferences where they discussed their stances on cryptocurrencies and the limitations placed on their agencies’ functions.
“Even within restrictions, we are still operational to an extent,” SEC Chair Paul Atkins stated on October 7, shortly after the shutdown began.
He expressed that while certain staff activities were curtailed, he maintained a degree of functionality in public engagements. Prior to the resolution of funding issues, he hinted at plans for the SEC to explore the creation of a token taxonomy in the approaching months, which would be aligned with the legal framework established by the Howey test. Pham also indicated that the CFTC was seeking consent for leveraged spot cryptocurrency trading as early as December.
Leadership Changes Ahead
In related news, Michael Selig, currently the chief counsel for the SEC’s crypto task force, is slated to testify before the Senate Agriculture Committee on Wednesday for confirmation as the incoming CFTC chair. Although the confirmation process could have proceeded during the government shutdown, Selig’s effectiveness would have been limited without a fully operational agency. Should the Senate confirm him, Pham is likely to step down as acting chair; however, the CFTC will continue to face leadership challenges, with only one of the five commissioner positions currently confirmed.
Today marks a pivotal moment as these financial regulation bodies aim to regain momentum after a frustrating period of inactivity.
