Government Shutdown Puts Crypto ETF Approvals On Ice
Routine approvals and filings are delayed while the shutdown limits SEC operations
Welcome to the Friday edition of the Crypto In America newsletter!
What you’ll read: Crypto ETF approvals paused until after the shutdown, Roman Storm moves to dismiss his conviction, and this week’s top stories.
The government shutdown has slowed operations across most federal agencies, including the SEC, affecting its ability to greenlight long-awaited crypto spot ETFs.
During a shutdown, the regulator can still act on fraud and market emergencies, but routine work slows. IPOs, ETFs, and other filings may be delayed, rulemaking may pause, and non-essential staff are often furloughed.
Because spot ETFs need a formal sign-off from the SEC’s Division of Corporation Finance to begin trading, anticipated product launches like Litecoin, Solana, and XRP will likely be on hold until funding is restored.
“It’s like a rain delay,” said Eric Balchunas, Senior ETF Analyst at Bloomberg.
Illustrating the point, when Crypto In America contacted the SEC for clarity, a spokesperson said the shutdown has limited their ability to respond to press inquiries.
Earlier this week, the SEC asked partner exchanges of several crypto ETF issuers to withdraw their 19b-4 filings after approving generic listing standards, which remove the need for individual filings. With these standards, crypto ETFs can go effective on a rolling basis, meaning a wave of launches could hit as soon as the shutdown ends.
Storm Strikes Back
Roman Storm is taking another swing at clearing his name. The Tornado Cash co-founder filed a motion in the Southern District of New York on Tuesday asking the judge to toss his conviction for running an unlicensed money transmitting business.
In August, a jury found him guilty on that count, but deadlocked on money laundering and sanctions evasion charges. Now his legal team is trying to wipe the slate clean and acquit him on all counts.
In a 103 page filing, Storm’s lawyers argue that Tornado Cash is just open source, immutable code, software Storm did not control once deployed. They argue the DOJ stretched the law by treating his failure to stop criminals using the platform as a crime, despite him having neither the duty nor the technical ability to do so.
“This is a negligence theory,” the filing says. “It is unsupportable under fundamental principles of criminal law and fails to establish the essential elements of all three conspiracy counts.”
The defense also leans on free speech protections, citing the First Amendment and the Berman Amendment, which shields distribution of informational materials from sanctions enforcement. They further argue New York was the wrong venue, pointing to what the defense describes as weak ties to the state, and stress that Tornado Cash did not actually transmit funds or provide a service to sanctioned users.
The government has until October 31 to respond. Oral arguments are set for December 18 and retrial motions on the hung money laundering and sanctions violations counts are on hold until then.
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Weekly Recap
ICYMI. Here are the biggest news stories this week from the intersection of Washington and Web3:
The White House withdrew Brian Quintenz’s nomination to lead the CFTC after weeks of uncertainty surrounding the status of his confirmation. The administration has been vetting new candidates for the position.
New York’s top crypto regulator Adrienne Harris will step down from the New York Department of Financial Services after four years in the role. Her interim replacement, Kaitlin Asrow, will start October 18.
The SEC has issued a no-action letter saying that investment advisers can use state-chartered trust companies as qualified custodians for crypto assets.
The Treasury is preparing to relax a proposed rule that would have forced companies like Michael Saylor’s Strategy to pay billions on unrealized bitcoin gains.
The SEC issued a no-action letter to DePIN protocol DoubleZero for its 2Z token, which means the company does not have to register token allocations on its network as securities transactions.
CME Group said it will launch 24/7 crypto futures and options trading in 2026.
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