Maxine Waters Warns U.S. Government Shutdown Could Trigger Cryptocurrency Market Crash

Key TakeawaysMaxine Waters, ranking Democrat on the U.S. House Financial Services Committee, warned that an extended government shutdown could lead to a cryptocurrency market crash.Waters criticized Trump and Republican lawmakers for pushing crypto integration into traditional finance without sufficient regulatory safeguards.She noted that 90% of SEC staff are furloughed and CFTC operations have largely halted, creating a regulatory vacuum in volatile market conditions.Waters: Shutdown Risks a “Catastrophic” Market CollapseAccording to TechFlow, on October 22, Representative Maxine Waters cautioned that a prolonged U.S. government shutdown could cause severe disruption to the cryptocurrency market, possibly leading to “another catastrophic crash.”Waters said that the shutdown has now entered its 21st day, severely limiting oversight of financial markets. Nearly 90% of the Securities and Exchange Commission (SEC) workforce is on furlough, most enforcement actions are suspended, and the Commodity Futures Trading Commission (CFTC) is effectively shut down.She emphasized that the lack of active regulation leaves investors exposed at a time when market volatility remains elevated.Regulatory Vacuum Raises Systemic RiskWaters also criticized Trump’s economic team and Republican lawmakers for promoting crypto integration into the traditional financial system without an accompanying regulatory framework.She pointed to the October 10 market crash, when Bitcoin (BTC) plunged 14.6%, Ethereum (ETH) fell 21%, Dogecoin (DOGE) tumbled over 50%, and the Trump token dropped 63%, wiping out billions in investor capital.Waters warned that without proper oversight, a continued government shutdown could trigger further instability across both crypto and traditional markets, potentially eroding public trust in digital assets.