The U.S. government entered its fourth week of shutdown on Wednesday, exceeding its second-longest shutdown on record, and the crypto industry is mourning the impact of big-ticket items, 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 sidelining other policy activities. This period was a narrow window for crypto action in which the Senate had a chance to match the House of Representatives’ Digital Asset Market Clarity Act to regulate US crypto markets. That top industry target has potentially missed its target for 2025.
“Politically, time is running out for major bills,” said Cody Carbone, CEO of the Digital Chamber. But potentially more painful than the political costs may be that the industry is missing out on essential US tax policies. “Lack of tax clarity, and missed opportunities to create fair tax treatments, could have a huge long-term cost.”
During the shutdown, federal agencies can only deploy staff they have deemed essential. Not only has this disrupted Congress’s crypto work, but it has also prevented federal regulators from working on crypto governance rules, including online work at the US Securities and Exchange Commission to draft rules for stablecoins and digital asset market proposals.
However, in some crypto policy areas, work is continuing as normal, such as an example shared by Custodia Bank CEO Caitlin Long, who said a US patent case for her company was resolved during the shutdown.
“We haven’t realized this,” he told a crowd at Fintech Week in Washington, DC.
However, the stalling of some efforts at the SEC – such as approval of exchange-traded products (ETPs) and initial public offerings – could have a detrimental impact on the sector in the long term.
So far, prediction markets are predicting the possibility that this government shutdown will exceed the longest on record, which was during Trump’s first term in the White House. The record is 35 days, which is still about two weeks away, but contracts on Polymarket and Kalshi are predicting a reopening in mid-November.
“We encourage lawmakers to find an off-ramp to close this,” Carbone said. “The crypto industry is feeling the pinch, as well as Americans.”
Kristin Smith, president of the Solana Policy Institute, said the social media site
“Progress on digital asset policy has not stopped,” Summer Mersinger, CEO of the Blockchain Association, said in a statement to CoinDesk. “Even amid the shutdown, the work continues to create smart, sustainable rules for crypto.”
Read More: State of Crypto: What will happen to crypto if the government remains closed
UPDATE (October 22, 2025, 17:38 UTC): Adds comment from the Blockchain Association.