Author: Demir, C Labs Crypto Observer
According to data from Polymarket, the probability of a US government shutdown by the end of the month has suddenly surged from 9% to 79%!
Due to the sudden nature of the event and it being a weekend, the crypto market has already taken a hit:
It's important to remember that the US government had already experienced a record 43-day shutdown starting on October 1st of last year, which ultimately ended on November 12, 2025, with the passage of a compromise bill (While the Binance community was celebrating, the US government had already been shut down for two weeks...).
Now, barely over two months have passed since that compromise bill, so why is there another potential shutdown?
01. Why is the government shutting down again?
The reason for this potential US government shutdown is that the bill passed last year was only a "Continuing Resolution" (CR), which temporarily extended funding authorization for most government agencies until January 30, 2026.
Only a few departments (such as the Department of Agriculture, Veterans Affairs, and Congressional operations themselves) received full-year funding.
Congress must pass a new, longer-term bill before January 30th; otherwise, agencies without full-year funding will face another lapse.
The reason for this shutdown threat is that Democrats disagree with the funding allocation plan for the Department of Homeland Security (DHS), citing recent shootings involving Immigration and Customs Enforcement (ICE) agents.
02. Originating from Somali Immigrant Fraud
Trump has recently been heavily focused on the Somali immigrant fraud case in Minnesota, using it as a pretext to intensify crackdowns on illegal immigration in the area.
However, ICE agents conducted two enforcement operations in Minneapolis, resulting in the fatal shootings of two US citizens, which has caused significant controversy in US public opinion.
The relief fund fraud case involving Somalis has confirmed losses of over $240 million, with other reports suggesting total losses could be as high as $9 billion.
Trump consequently made strong public statements, saying Somalis should "get out of the US," and accused officials of "inciting rebellion."
Using this as a pretext, the Department of Homeland Security (DHS) escalated its enforcement actions against illegal immigration, deploying approximately 2,000 additional ICE agents to Minneapolis, the capital of Minnesota. The initial targets of the operation were Somalis with final orders of removal.
But it was these aggressive enforcement actions and the subsequent shootings of US citizens by ICE agents that have now led Senate Democrats to oppose the House appropriations bill containing DHS funding.
Democrats are demanding accountability and reform for ICE's actions, while Republicans want to continue pushing their border security agenda.
This deadlock directly leads to the current risk of a government shutdown.
03. Crypto Market Becomes the "Payer"
The Somali fraud case appears massive, with confirmed losses of $240 million and potential total involvement up to $9 billion.
Because Democrats suddenly raised objections over the weekend to the funding for DHS, it is once again the crypto market that is bearing the brunt of this shock.
Today's crash in the crypto market, caused by the risk of a US government shutdown, has already resulted in over $600 million in long positions being liquidated in a single day, and the crypto market capitalization has evaporated by more than $30 billion in one day...
So, the money defrauded from US government welfare by Somalis in Minnesota has finally been paid for by the crypto market today.
As for how the US stock market will react, we'll have to wait until it opens tomorrow to find out~
