The Securities and Exchange Commission (SEC) is delaying crypto ETF approvals again primarily due to the ongoing U.S. government shutdown, which has severely limited the agency’s operational capacity. During this shutdown, the SEC is operating with a skeleton staff—only about 390 of its 4,200 employees remain on duty, focusing solely on emergencies and market monitoring rather than reviewing or approving new products like crypto ETFs. This staffing shortage has effectively frozen the review process for crypto ETF applications, causing significant delays that could push decisions well into 2026[1][2].
Despite the SEC’s recent efforts to fast-track crypto ETF approvals by introducing generic listing standards and removing some regulatory hurdles, the government shutdown has stalled this progress. The new framework was designed to speed up approvals by shifting from a lengthy case-by-case review to a standard listing process, which would allow a surge of crypto and commodity-based exchange-traded products (ETPs) to enter the market more quickly. However, with the shutdown in place, no staff are available to review, comment on, or accelerate these filings, creating a backlog that cannot be cleared until normal operations resume[1][3][4].
The shutdown’s impact is particularly notable for altcoin ETFs such as those based on Cardano (ADA) and XRP. Market participants had been optimistic about approvals by the end of 2025, with some betting on a 90% chance of approval within the year. However, the possibility of a prolonged shutdown—estimated at around 36-37% chance by market data—means that even the fastest approvals cannot happen when the SEC’s review teams are inactive. This has led to increased speculation that decisions on these ETFs may be delayed until 2026 or beyond[1][2].
In addition to the shutdown, the SEC’s cautious regulatory approach to crypto products also contributes to delays. The agency has historically been careful about approving crypto ETFs due to concerns about market manipulation, investor protection, and the overall volatility of cryptocurrencies. While recent rule changes have aimed to clear the path for more crypto ETFs by setting clear standards and disclosure requirements, the SEC still requires thorough review to ensure these products meet regulatory standards. This inherent caution, combined with the current operational freeze, compounds the delay problem[4][5].
In summary, the SEC’s delay in approving crypto ETFs again is mainly due to the ongoing government shutdown that has drastically reduced its workforce and halted the review process. Even though the SEC has introduced new rules to fast-track crypto ETF approvals, the shutdown prevents these changes from taking effect in practice. Market optimism about approvals by the end of 2025 is tempered by the reality that without sufficient staff to process applications, decisions will likely be postponed into 2026. Additionally, the SEC’s careful regulatory stance on crypto products means that even after the shutdown ends, approvals may proceed cautiously to ensure investor protection and market integrity[1][2][3][4][5].