Last week SEC Chairman Gary Gensler warned that without funding come October 1st, the SEC will start being run by what he called a skeleton crew. Today the White House issued a "shutdown warning" to all Federal Departments and Agencies so that the essential staff vs. the furloughed staff would be known. What happens to the SEC in this situation and how will that affect crypto?
The SEC currently has roughly 4,600 employees and of these employees, roughly 90% of them will be furloughed come Sunday. This shrinks the staffing levels for all markets from 4,600 across the US to just 460 employees an eye-watering cut. While some have previously hinted at what would occur we now have solid answers.
Essentially the SEC would change to more or less an emergency response/reactionary agency. This means that the investigations and the lawsuits that they are currently involved in both in traditional finance and in crypto will essentially grind to a halt. It is important to note that Federal courts still have funding till October 13 before they will have to address funding issues as well.
The skeleton crew that will be running the SEC will really just be in charge of keeping everything together and making sure that nothing breaks. Until the funding is passed and the SEC can bring back its furloughed workers we won't see much in the investigations and oversight announcements in the crypto space except for those that are complete and they have just set their releases for X date. It is likely that SEC Chairman Gensler will try to remain at the forefront of regulation even as his agency is not really operational.
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