The US government entered its fourth week of shutdown on Wednesday, surpassing its second-longest shutdown ever, and the crypto industry is lamenting the big-ticket items affected, even though the shutdown of federal agencies is yet to cause direct pain.
The government shutdown means the Senate is primarily focused on the task of reopening it, largely pushing aside other political efforts. This period was supposed to be the narrow window for crypto action, where the Senate had a chance to match the House of Representatives’ Digital Asset Market Clarity Act to regulate the US crypto markets. The industry’s top target has potentially missed its 2025 target.
“Politically, time is running out on key bills,” said Cody Carbone, CEO of the Digital Chamber. But potentially more painful than political costs, the industry could miss out on necessary U.S. tax policies. “The lack of tax clarity and missed opportunities to create reasonable tax treatments can be a major long-term cost.”
During the shutdown, federal agencies can only deploy employees they deem necessary. Not only has it hindered Congress’ crypto work, but it has also stopped federal regulators from working on crypto governance rules, including rules for stablecoins and the online work of the US Securities and Exchange Commission to hatch proposals for the digital asset market.
However, in some areas of cryptopolicy, work has continued as usual, such as an example shared by Caitlin Long, CEO of Custodia Bank, who said a US patent case was resolved for her company during the shutdown.
“We haven’t felt it,” she told an audience at DC Fintech Week in Washington.
But the shutdown of certain efforts at the SEC — such as approvals of exchange-traded products (ETPs) and initial public offerings — could have a detrimental effect on the space in the long term.
So far, prediction markets are predicting a likelihood of this government shutdown exceeding the longest ever, which was during Trump’s first term in the White House. The record is 35 days, which is still about two weeks away, but contracts at Polymarket and Kalshi predict the doors will reopen in mid-November.
“We’re calling on lawmakers to find an exit for the closure,” Carbone said. “Americans are feeling the pinch as well as the crypto industry.”
Kristin Smith, president of the Solana Policy Institute, said in a post on social media X that the shutdown has not derailed policy progress, and the meetings industry officials had Wednesday with U.S. senators about the market structure legislation suggest those arguing that point may be true.
“Progress on digital asset policy has not hit pause,” Summer Mersinger, CEO of the Blockchain Association, said in a statement to CoinDesk. “Even in the midst of a shutdown, work continues to build smart, sustainable rules for crypto.”
Read more: State of crypto: What will happen to crypto if the government shutdown persists
UPDATE (October 22, 2025, 17:38 UTC): Adding comment from the Blockchain Association.
