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U.S. Shutdown Over 40 Days Freezes SEC Crypto ETF Reviews

Investor demand for regulated crypto exposure is surging, raising expectations of a backlog-driven review burst once operations resume.

Overview

  • Reduced staffing at the Securities and Exchange Commission has paused routine reviews, leaving dozens of crypto-related filings, including XRP and staked ether ETF proposals, waiting for action.
  • The funding lapse has stretched beyond 40 days, described by outlets as the longest on record, with prediction markets indicating better-than-even odds it extends past 42 days.
  • Investor interest remains strong, as Charles Schwab reports roughly 20% of its clients hold U.S.-listed crypto ETFs and traffic to its crypto portal has risen about 90% year over year.
  • Issuers have kept applications in the pipeline, with multiple XRP ETF proposals, a VanEck fund tied to Lido’s ether, and a 21Shares leveraged product awaiting review once activity resumes.
  • Analysts expect a concentrated wave of decisions when agencies reopen, though they caution that legal, compliance, and market-structure hurdles could still limit or condition approvals.