As the U.S. government shutdown drags on, the Securities and Exchange Commission (SEC) is overwhelmed by a surge of new crypto ETF proposals. Even with much of its regulatory capacity on pause, multiple firms continue filing ambitious listings, creating a backlog of unreviewed applications. This article explores the tension between market momentum and regulatory paralysis.
Over the past week, at least five new crypto ETF applications have landed on the SEC’s desk—even as much of its staff is furloughed or operating under minimal staffing constraints. Normally, each filing undergoes rigorous review, but the current shutdown has stalled most assessments, leaving many proposals in limbo.
Among the standout filings is a proposed Ethereum staking ETF, aiming to allow holders to benefit from stake rewards. Other firms are pushing envelope ideas like 2× leveraged ETF exposure to niche tokens. ARK Invest, for instance, has filed multiple Bitcoin ETFs with yield-generating features or partial downside protection.
A filing blitz meets bureaucratic freeze
This regulatory gridlock affects many pending projects. Roughly 16 crypto ETF proposals were awaiting final decision this month, and 21 additional new ones have entered the queue in early October. The longer the shutdown continues, the more these approval timelines may extend into November or beyond.
For issuers, timing is crucial. Many seek approval before year-end to capture institutional flows in crypto. But with the SEC’s review engines stalled, that window may narrow dangerously.
In sum, this episode spotlights a structural friction: market enthusiasm for new crypto investment vehicles is colliding with regulatory inertia. Hundreds of billions in potential capital are now waiting—not in the market, but on the desks of regulators, pending political resolution and operational revival.
