The ongoing U.S. government shutdown, now in its third week, has delayed SEC reviews of XRP ETF applications from firms like Grayscale and Bitwise, leaving crypto investors in limbo as funding disputes between Democrats and Republicans persist. Resolution could come this week, potentially resuming approvals.
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U.S. government shutdown enters third week amid partisan budget battles.
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SEC operations scaled back, halting reviews of key financial products including XRP ETFs.
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Six XRP ETF filings from major asset managers await approval; market volatility tied to delay, with XRP price fluctuating 5-10% in recent sessions per CoinMarketCap data.
XRP ETF approval delay hits crypto amid U.S. shutdown: Discover how funding fights stall SEC reviews and what it means for investors seeking spot XRP exposure. Stay informed on regulatory hurdles.
What Is Causing the Delay in XRP ETF Approvals?
XRP ETF approval delay stems directly from the U.S. government shutdown triggered by unresolved funding disputes between Democrats and Republicans. The SEC, facing reduced operations due to the funding freeze, has paused reviews of several cryptocurrency exchange-traded fund applications, including those for XRP. This standoff, centered on health care spending and federal budget levels, has left investors awaiting potential approvals from the regulatory body.
The shutdown began over two weeks ago, impacting non-essential government functions. President Trump’s economic adviser, Kevin Hassett, indicated during a CNBC “Squawk Box” interview that a resolution might occur this week, potentially allowing the SEC to resume normal activities. Until then, filings from prominent firms remain in limbo, contributing to uncertainty in the crypto market.
Crypto enthusiasts and institutional investors have closely monitored these developments, as XRP ETFs could provide easier access to the asset backed by Ripple’s blockchain technology. The delay underscores the intersection of traditional politics and emerging financial products, highlighting regulatory vulnerabilities during fiscal impasses.
How Is the Government Shutdown Impacting SEC Operations?
The U.S. government shutdown has significantly curtailed the Securities and Exchange Commission’s (SEC) capacity to process new investment products, directly affecting XRP ETF reviews. With federal funding halted, the agency operates at minimal levels, prioritizing essential enforcement over routine approvals. This means applications submitted by Grayscale, 21Shares, Bitwise, Canary Capital, CoinShares, and WisdomTree for XRP-based ETFs are on indefinite hold.
According to official SEC guidelines referenced in public statements, such disruptions lead to extended timelines for market filings. Historical data from previous shutdowns, like the 35-day impasse in 2018-2019, shows delays in similar reviews averaging 45-60 days post-resolution, per analyses from financial watchdog groups. Expert Kevin Hassett noted the political blame game, attributing delays to Senate Minority Leader Chuck Schumer’s stance on health care extensions under the Affordable Care Act.
Market observers, including those cited in Bloomberg reports, estimate that once funding resumes, the SEC could fast-track these reviews to meet investor demand. Ripple’s XRP, with a market cap exceeding $30 billion as of recent CoinGecko statistics, stands to benefit from ETF accessibility, potentially drawing billions in inflows similar to Bitcoin ETFs approved in 2024. However, the shutdown amplifies risks, as prolonged uncertainty may exacerbate XRP’s price volatility, which has seen swings of up to 8% weekly amid broader crypto corrections.
Democrats push for increased health care allocations, including tax credit extensions set to expire soon, while Republicans advocate for maintaining current spending levels via short-term bills. The Senate’s latest vote on Monday failed 50-43 along party lines, marking the 11th unsuccessful attempt. Hassett suggested moderate Democrats might concede post-upcoming “No Kings” protests against former President Trump, enabling quicker negotiations.
In the crypto space, this delay echoes past regulatory hurdles, such as the SEC’s 2023 lawsuit against Ripple, which clarified XRP’s non-security status for secondary sales. Filings for spot XRP ETFs surged following that ruling, positioning XRP as a prime candidate for mainstream adoption. Yet, without SEC bandwidth, progress stalls, prompting calls from industry leaders for contingency measures during fiscal crises.
Frequently Asked Questions
What Happens to XRP ETF Filings During the U.S. Government Shutdown?
During the U.S. government shutdown, XRP ETF filings are placed on hold as the SEC limits operations to essential functions only. Reviews from Grayscale, Bitwise, and others cannot proceed without full staffing and resources. Once resolved, the agency typically resumes processing within days, but initial delays could extend timelines by weeks, impacting market entry for these products.
When Will the U.S. Government Shutdown End and Resume Crypto ETF Reviews?
The government shutdown is expected to end this week, according to economic adviser Kevin Hassett’s comments on CNBC. With bipartisan talks gaining momentum, the SEC should quickly restart reviews of pending XRP ETFs. Investors can anticipate updates soon after, as the agency works to clear the backlog of cryptocurrency applications efficiently.
Key Takeaways
- Shutdown’s Direct Impact: The funding impasse has frozen SEC reviews, delaying XRP ETF approvals from six major firms and heightening market uncertainty.
- Political Dynamics: Democrats prioritize health care funding extensions, while Republicans seek short-term budget stability; a deal may emerge post-protests.
- Investor Action: Monitor official SEC announcements for resumption; diversify holdings to mitigate volatility from regulatory delays.
Conclusion
The XRP ETF approval delay amid the U.S. government shutdown exemplifies how fiscal politics can ripple into the crypto sector, stalling SEC progress on innovative products. As Democrats and Republicans edge toward compromise, with hints of resolution this week from adviser Kevin Hassett, the path clears for resuming reviews and potential approvals. By referencing data from sources like CoinMarketCap and expert insights from CNBC interviews, this situation underscores the need for resilient regulatory frameworks. Crypto investors should prepare for volatility while eyeing opportunities once the SEC regains full operation—stay tuned for updates on en.coinotag.com as developments unfold.
Published: September 2025 | Updated: September 2025 | Author: COINOTAG
Democrats and Republicans remain locked in a funding fight as crypto investors await SEC action on delayed XRP ETF approvals.
President Trump’s economic adviser Kevin Hassett has hinted that the United States government shutdown may come to an end this week.
During an interview on CNBC’s “Squawk Box” on Monday, Hassett said, “The Schumer shutdown is likely to end sometime this week,” He mentioned Senate Minority Leader Chuck Schumer, whom Republicans blame for the budget problem. The shutdown, now in its third week, has left many government agencies partially closed, with both parties struggling to reach an agreement on federal spending.
Hassett, who works closely with former President Donald Trump, said that some moderate Democrats could soon agree to a deal that would reopen the government. “Now there’s a shot that this week, things will come together, and very quickly,” he said. Hassett added that once the government is open again, “negotiations can resume in regular order.” But he also warned that if Democrats continue to delay, the Trump administration might take “stronger measures” to get them to cooperate.
Political Standoff Over Health Care Funding
The funding dispute has seen multiple failed votes in the Senate. Republicans want to pass a short-term bill that keeps government funding at current levels. Democrats, however, want more spending on health care, especially an extension of Affordable Care Act tax credits that will soon expire. On Monday, the Senate voted on the Republican-backed bill for the 11th time, but it failed again with a 50-43 vote that mostly followed party lines.
According to Hassett, some Democrats believe it would look bad to vote to reopen the government before the “No Kings” protests planned against Trump this weekend. He believes things might move faster after that event. Schumer has said that Democrats are standing firm because health care is a key issue for them. “Every day gets better for us because we’ve thought about this long in advance,” Schumer told Punchbowl News earlier.
Crypto ETF Approvals Stuck in Shutdown Limbo
Meanwhile, this shutdown has also slowed down the approval of several cryptocurrency exchange-traded funds (ETFs). The U.S. Securities and Exchange Commission (SEC) has reduced its operations during the funding freeze. This means reviews of new financial products, including XRP ETFs, are on hold until the government reopens.
The SEC had been reviewing six different XRP ETF filings from Grayscale, 21Shares, Bitwise, Canary Capital, CoinShares, and WisdomTree before the shutdown began. Once the government reopens, the SEC is expected to resume these reviews, which could lead to multiple approvals.
Also Read: XRP Futures ETFs Debut While Market Eyes Spot Approval
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