Is the US government about to shut down again? Why is the crypto market ultimately footing the bill for the Somali immigration scam?

The probability of a U.S. government shutdown by the end of January has surged from 9% to 79%, according to Polymarket data, triggering a sharp sell-off in the cryptocurrency market.

The potential shutdown stems from a political deadlock. Democrats are blocking a funding bill for the Department of Homeland Security (DHS) due to controversy over recent Immigration and Customs Enforcement (ICE) actions in Minneapolis, which resulted in the deaths of American citizens.
These ICE operations were part of a heightened crackdown on illegal immigration, initiated by the Trump administration following a massive Somali immigrant fraud case in Minnesota involving up to $9 billion.
The market impact was immediate and severe. The crypto market experienced a preliminary drop over the weekend, leading to over $600 million in liquidated positions and a total market cap loss exceeding $30 billion in a single day, effectively making crypto investors bear the brunt of the political fallout from the scandal.
The funding crisis arises because last year's bill was only a temporary "Continuing Resolution" set to expire on January 30, 2026, requiring Congress to pass a new long-term spending bill to avoid a shutdown.

Author: Demir , C Labs Crypto Watch

According to data from Polymarket, the probability of the US government shutting down at the end of this month has jumped from 9% to 79%!

Due to the suddenness of the event and the fact that it occurred over the weekend, the crypto market had already experienced a preliminary drop.

It's worth noting that the US government's record-breaking 43-day shutdown, which began on October 1st of last year, finally ended on November 12th, 2025, with the passage of a compromise bill. (The Binance community is celebrating, while the US government has been shut down for two weeks...).

It's only been a little over two months since this compromise bill was passed, so why is there a shutdown?

01. Why is the government shut down again?

The reason for this US government shutdown is that the bill passed last year is only a "Continuing Resolution" (CR), which temporarily extends the funding authorization for most government agencies until January 30, 2026.

Only a few departments (such as the Department of Agriculture, the Department of Veterans Affairs, and Congress itself) received funding for the entire year.

Congress must pass a new, longer-term bill by January 30, or agencies that do not receive full-year funding will face another shutdown.

The reason for this shutdown is that the Democrats disagree with the funding plan for the Department of Homeland Security (DHS), citing the recent shooting of an Immigration and Customs Enforcement (ICE) agent.

02. Originating from Somali immigration scams

Trump has recently been fixated on the Somali immigrant fraud case in Minnesota, using it as a pretext to intensify the local crackdown on illegal immigration.

However, ICE agents conducted two law enforcement operations in Minneapolis, resulting in the deaths of two American citizens, which caused considerable controversy in the United States.

The confirmed amount involved in the Somali relief fraud case exceeds $240 million, with other reports suggesting the total losses could reach as high as $9 billion.

Trump subsequently made inflammatory remarks, saying that Somalis should "get out of America" and accusing Minnesota officials of "inciting rebellion."

Using this as a pretext, the Department of Homeland Security (DHS) escalated its crackdown on illegal immigration, deploying approximately 2,000 additional ICE agents to Minneapolis, the state capital. The initial targets were Somalis with final deportation orders.

But it is precisely these aggressive law enforcement actions and the subsequent shooting of an American citizen by an ICE agent that have led Senate Democrats to now oppose a House appropriations bill that includes funding for DHS.

Democrats are calling for accountability and reform of ICE's practices, while Republicans want to continue pushing their border security agenda.

This deadlock has directly led to the current government facing the risk of shutdown.

03. The crypto market becomes the "foot of the bill"

The Somali financial fraud appears to be substantial, with a confirmed $240 million and the total amount potentially reaching $9 billion.

The crypto market was hit hard by a sudden attack from Democrats over the weekend to oppose funding for the DHS.

Today's plunge in the cryptocurrency market due to the risk of a US government shutdown has resulted in over 600 million positions being liquidated in a single day, and the market capitalization of cryptocurrencies has evaporated by more than $30 billion...

So the money Somalis swindled from the US government in Minnesota has finally been paid for by the crypto market.

As for how the US stock market will react, we'll have to wait until the market opens tomorrow to find out.