Government shutdown bad for crypto.

Government shutdown bad for crypto.

The Impact of Government Shutdown on the Blockchain Industry

Introduction

The blockchain industry has been on a steady rise, gaining momentum and garnering support from various sectors worldwide. However, like any other industry, it is not immune to external factors that can impede its growth and development. One such factor is a government shutdown. In this article, we will explore the potential implications and consequences of a government shutdown on the blockchain industry, drawing insights from past experiences and examining the current situation.

Wait, I’ve Seen This One Before

The Narrative

Back in 2018 and 2019, the United States government experienced a shutdown that had repercussions for the cryptocurrency industry. This shutdown delayed approvals for companies and slowed down progress towards greater regulatory acceptance of crypto.

Why It Matters

As history repeats itself, we find ourselves facing the possibility of another government shutdown. However, this time around, the situation appears to be even more peculiar than before.

Breaking it Down

There is a high probability that the federal government will be shut down by the time this article reaches you. The House of Representatives is struggling to reach an agreement to keep the government running in the short term. House Speaker Kevin McCarthy is facing dissatisfaction from his right flank, decreasing the chances of a continuing resolution that would ensure federal employees are paid.

During the previous shutdown, companies such as Bakkt and ErisX saw crucial approvals delayed by weeks. Additionally, a bitcoin exchange-traded fund application was withdrawn, with one of the company executives explicitly blaming the shutdown. It seems we are already witnessing the Securities and Exchange Commission (SEC) preemptively postponing bitcoin ETF applications. Coinbase is anxiously awaiting a response from the SEC on its Mandamus petition by October 11.

While the shutdown may not be a death blow for crypto projects, there are certain concerns that need addressing. Civil and bankruptcy court cases may slow down after a few weeks, impacting the overall legal landscape. The SEC may experience constraints in terms of its litigation capacity during this period. Furthermore, the progress of crypto legislation is likely to be significantly delayed or even halted entirely.

Stories You May Have Missed

As we navigate through the turbulence caused by the impending government shutdown, let’s take a moment to catch up on recent developments in the blockchain industry.

  • Binance and its founder, Changpeng ‘CZ’ Zhao, along with Binance.US, have filed for the dismissal of a lawsuit filed by the U.S. Securities and Exchange Commission.
  • Former Senator Pat Toomey believes that crypto legislation is unlikely to move through Congress in this term.
  • The UK has passed an Online Safety Bill that will apply to the Metaverse, directing companies to address illegal and harmful content.
  • Dive into the messy world of DAO governance, as Danny Nelson explores a $27 million crypto loss in Nouns DAO.

This Week’s Schedule

Let’s take a look at some events scheduled for this week in the blockchain industry:

  • Monday – Creditors for Prime Trust will have a meeting at 18:00 UTC (2:00 p.m. EDT).
  • Wednesday – The House Financial Services Committee will hold a hearing with Securities and Exchange Commission Chair Gary Gensler at 14:00 UTC (10:00 a.m. EDT).

Elsewhere

In the wider world, several interesting developments have caught our attention:

  • The U.S. Consumer Product Safety Commission has surprisingly released a musical album. Yes, you read that right.
  • Mike Masnick from Techdirt analyzes the recent statements made by Elon Musk on the former bird site and its potential implications.
  • U.S. Senator Robert Menendez was indicted on corruption charges last week, making headlines and causing ripples in the political realm.

Conclusion

As we brace ourselves for a possible government shutdown, the blockchain industry faces uncertain times ahead. Past experiences have shown that such shutdowns can severely impact regulatory approvals, legal proceedings, and legislative progress. Nonetheless, the industry continues to thrive and innovate, demonstrating resilience in the face of adversity. While the implications of a government shutdown cannot be entirely mitigated, stakeholders within the blockchain industry are well-equipped to navigate these challenging waters.