How the American government shutdown is soon going to impact Bitcoin

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American politics has begun 2019 in what’s become its traditional friendly fashion. US President Donald Trump is at loggerheads with his Democrat opponents over funding for his planned border wall, so much so that a partial government shutdown has been ongoing for over two weeks. It’s a situation that’s left hundreds of thousands of government workers without pay, something that’ll continue until an agreement over budget is reached.

And there’s been a knock-on consequence with other matters before the US government, too.

Coming up before the US Securities and Exchange Commission (SEC) in the coming weeks is a long-delayed decision over whether to give a green light to a Bitcoin exchange-traded fund (ETF) proposal. It’s a crucial decision, given that a formally approved Bitcoin ETF would be a profile builder for the currency, and a significant step towards its mainstream acceptance.

However, with the shutdown in full flow, questions had been asked over the regulatory powers of government bodies in the midst of all of this. After all, the SEC is one of the organisations affected by the shutdown, and it has a final deadline on the Bitcoin ETF coming. It’d been posited that if the SEC was understaffed at best, the Bitcoin ETF would get a go ahead almost by default. This is due to guidelines that automatically approve a rule change put before the SEC if it doesn’t make a decision by its final deadline. However, lawyer and crypto expert Jake Chervinsky has dampened down the likelihood of it happening.

Answer a question on Twitter, Chervinsky argued that “it’s true that a proposed rule change is auto-approved if the SEC doesn’t make a decision by the deadline, but in reality it would never happen. The SEC has enough staff to put out a decision, even if it’s a one-pager saying “denied for reasons to be explained later”.

With the shutdown showing no signs of ending, and Trump promising to keep it going for months if he doesn’t get what he wants, the SEC may find itself less than fully powered for some time to come. Quite how that affects its work in the crypto sector – on which it had been cracking down over the last few months – remains to be seen.

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