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The U.S. Government Faces Another Shutdown Crisis, with the 2023 fiscal year ending on September 30th, and Congress has yet to pass the 2024 federal budget that would take effect on October 1st. If an agreement on a temporary funding bill is not reached by September 30th, the federal government will shut down from October 18th.
Cointelegraph reported that if the federal government does shut down, it would prevent lawmakers from advancing any legislation. In July of this year, members of the U.S. House Financial Services Committee voted in favor of bills like the "21st Century Financial Innovation and Technology Act," "Blockchain Regulatory Clarity Act," "Payment Stablecoin Clarity Act," and "Token Safe Harbor Act," which were expected to go to a full House vote during this congressional session.
Ron Hammond, Director of Government Relations at the Blockchain Association, pointed out that the longer the federal government remains shut down, the more likely it is to delay various bills, including those related to cryptocurrency, like the "21st Century Financial Innovation and Technology Act." Hammond noted that while some bills have bipartisan support, there are potential obstacles, such as differing positions on stablecoin legislation.
In addition to the potential impact on the progress of cryptocurrency legislation in Congress, the U.S. Securities and Exchange Commission (SEC) could be affected. The SEC's responses to cryptocurrency ETF applications and progress in several key lawsuits may be disrupted if the federal government shuts down.
SEC Chairman Gary Gensler previously warned that in the event of a government shutdown, the SEC would operate with only skeleton staff, potentially affecting the agency's ability to review registration statements for companies seeking to go public and fully supervise the market.
An SEC spokesperson stated that the SEC has operational plans for a government shutdown, as this situation has occurred before, including during the Trump administration when the federal government shut down for 35 days. Under the plan, in the event of a government shutdown, the SEC would pause litigation when possible, except when the situation posed an imminent threat to consumers' property. The SEC would also stop reviewing and approving applications for new products.
Former SEC official and current partner at Mercury Strategies, Anne-Marie Kelley, mentioned that from a technical standpoint, the SEC's plan allows for measures to prevent imminent harm to investors, markets, or property. However, the SEC has some budget flexibility when it comes to using reserved funds.
On the other hand, federal courts may continue to operate normally for several weeks until the Department of Justice exhausts its cash reserves from sources like court fees. Lawsuits involving the SEC and companies like Binance and Coinbase are expected to continue. If the government shutdown lasts longer, court proceedings may slow down, and bankruptcy court procedures might progress more slowly.
The cryptocurrency community will be keeping an eye on the upcoming criminal trial of FTX founder SBF next month to see if it is affected. John Sparacino, an attorney at Mc Kool Smith law firm, noted that federal criminal proceedings must continue under the Constitution, but if the government remains shut down, some court activities may slow down, and bankruptcy court proceedings may progress at a reduced pace. |
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Post time 30-9-2023 11:12:17