For weeks, analysts and fund managers had pointed to early October as the likely start of the “crypto ETF season.” Solana-, XRP-, Cardano-, and even Dogecoin-focused funds were expected to be among the first. However, the SEC’s shutdown operations plan has paused all non-emergency activities, including ETF approvals.

Shutdown forces SEC to scale back

The SEC confirmed it is halting reviews of filings for new financial products. It also suspended approvals for exchange-traded funds, investment advisers, and broker-dealer registrations. Only essential staff remain on duty, focused on emergency litigation or matters involving threats to property.

The EDGAR system remains available, allowing companies to submit required reports and updates. However, filings that require staff review—such as registration statements or offering qualifications—will not progress. Issuers without automatic shelf registration statements may face significant delays.

The agency clarified that post-effective amendments to registration statements will still become effective after the statutory period. But without staff oversight, no acceleration requests, exemptions, or interpretive guidance will be processed.

Analysts note the shutdown has shifted the timeline for launching crypto-related funds. Bloomberg’s Eric Balchunas wrote earlier this week that “Crypto ETF approval season has officially arrived.” Now, such approvals seem unlikely until lawmakers resolve the budget standoff.

Political standoff clouds the timeline

The U.S. government entered a partial shutdown after lawmakers failed to pass a funding bill. Senate Republicans and Democrats remain at odds over budget priorities, particularly healthcare cuts and spending allocations.

The SEC, along with other agencies, has scaled back operations following the lapse in funding. A notice on Wednesday confirmed that most staff had been instructed to secure work and prepare for an eventual restart.

Industry leaders have weighed in on the fallout. Robinhood CEO Vlad Tenev said at Token2049 in Singapore that while delays are likely, he remains optimistic: “I think that it’ll get sorted eventually,” he said, adding that the key question is how long the process will take.

Others were less upbeat. Nate Geraci, co-founder of the ETF Institute, wrote that the shutdown will “definitely impact the launch of new spot crypto ETFs,” adding: “ETF Cryptober might be on hold for a bit.”

Meanwhile, investors awaiting SEC decisions face renewed uncertainty. The agency had been reviewing dozens of applications—from altcoin funds and token baskets to hybrid strategies. Initial approvals were expected for Solana-focused funds.

The pause comes amid growing demand for regulated crypto investment products. Institutional and retail investors have been positioning for expanded access via ETFs. The shutdown interrupts that momentum.

For now, there is no clear timeline for a resolution. House Speaker Mike Johnson said Republicans will not accept changes to their budget proposal. Democrats insist on reversing the cuts introduced in July. Without compromise, the SEC’s staffing will remain limited.

Until then, ETF applicants must wait. The EDGAR system will continue to accept filings, but without staff review, progress is stalled. The SEC has said employees will return to full duty on the first workday after appropriations are enacted.