The U.S. government entered its fourth week of shutdown on Wednesday, surpassing its second-longest shutdown on record, and the crypto industry is lamenting the big-ticket items that are affected, even though the shutdown of federal agencies is not yet causing direct pain.
The government shutdown means the Senate is primarily focused on the task of reopening it, largely leaving other policy goals aside. This period was supposed to be the narrow window for crypto action in which the Senate had a chance to align with the House of Representatives’ Digital Asset Market Clarity Act to regulate US crypto markets. This primary objective of the industry has potentially missed its mark for 2025.
“Politically, time is running out on key bills,” said Cody Carbone, CEO of the Digital Chamber. But the failure of the industry to benefit from needed U.S. tax policies could be even more painful than the political costs. “Lack of tax clarity and missed opportunities to create reasonable tax treatments could result in a greater cost in the long run.”
During the shutdown, federal agencies can only deploy employees they deem essential. This not only blocked Congress’ work on crypto, but it also blocked federal regulators from working on crypto governance rules, including regulations for stablecoins and the U.S. Securities and Exchange Commission’s online work to develop digital asset market proposals.
In some areas of crypto policy, however, work continued as normal, such as in the example shared by Custodia Bank CEO Caitlin Long, who said a U.S. patent issue was resolved for her company during the shutdown.
“We didn’t feel it,” she told the crowd at DC Fintech Week in Washington.
However, halting certain SEC efforts – such as approving exchange-traded products (ETPs) and IPOs – could have a detrimental effect on the space in the longer term.
So far, predictive markets are predicting that this government shutdown will surpass the longest on record, which occurred during Trump’s first term in the White House. The record is 35 days, still about two weeks away, but the contracts on Polymarket and Kalshi provide for a reopening of the doors in mid-November.
“We encourage lawmakers to find a way out of the shutdown,” Carbone said. “Americans are feeling the pinch, and so is the crypto industry.”
Kristin Smith, president of the Solana Policy Institute, said in a post on the social media site
“Progress in digital asset policy has not stopped,” Summer Mersinger, CEO of the Blockchain Association, said in a statement to CoinDesk. “Even in the face of a shutdown, the work to build smart, sustainable rules for crypto continues.”
Read more: State of Crypto: What happens to crypto if the government shutdown persists
UPDATE (October 22, 2025, 5:38 p.m. UTC): Adds comment from the Blockchain Association.
