The effects of the U.S. federal government’s quasi-annual shutdown—the latest spurred by President Trump’s temper tantrum over his big, dumb border wall—have finally trickled into the world of crypto.
Last week, the U.S. Securities and Exchange Commission announced it would be limiting its operations, reducing its staff during the shutdown and restricting functions to those that meet critical needs. “Effective Thursday, Dec. 27 and until further notice, the agency will have a very limited number of staff members available,” the SEC said in a statement pinned to its homepage.
Uh-oh. This sounds like the premise of “The Purge”—only instead of people being able to commit legalized murder over a 12-hour period, scammers shilling unregistered securities offerings will flood the crypto market until the government shutdown ends. If ever.
So, it’s back to the crypto scams of 2017-18?
Yeah—no:, that isn’t how it’s going to work. The SEC is careful to note that its staff will still be available to “respond to emergency situations involving market integrity and investor protection, including law enforcement.” In fact, a 20-page doc,“Operations Plan Under a Lapse in Appropriations and Government Shutdown,” lays out exactly how the Commission will operate in the event that the shutdown is prolonged.
The document notes that the SEC will continue to perform functions related to its ongoing cybersecurity protections, and its staff “will attempt to respond to certain critical matters, including allegations of ongoing fraud and misconduct.” So scammers beware.
But, unfortunately, companies looking to do things by the book might get the short of end of the big-dumb-border-wall tantrum stick. According to the SEC’s contingency plan, the Division of Corporation Finance (the one responsible for managing ICO and crypto-related matters) will be “unable to process filings, provide interpretive advice, issue no-action letters or conduct any other normal Division and Office activities.” This means “new or pending registration statements or applications for exemptive relief will not be processed regardless of the status of any review of those filings.”
It’s a sad time for the good guys, who are trying to do the right thing. On the bright side, maybe this stops the big, dumb WallCoin from becoming a thing.