A coalition of cryptocurrency fund managers, comprising VanEck, 21Shares, and Canary Capital, have implored the U.S. Securities and Exchange Commission (SEC) to revert to its previous ‘first-to-file’ method of approving exchange-traded products (ETPs). The trio argues that the current system is making the marketplace less equitable.
The firms expressed their apprehensions regarding the SEC’s recent departure from the ‘first-to-file’ approach, where financial products are approved based on the order of their submission. They made these sentiments known in a public letter addressed to SEC Chair Paul Atkins and published on X last Friday.
“The SEC’s deviation from this protocol has undermined the regulatory principles of innovation, fairness, and market competition,” the firms remarked in the letter. They added, “We urge you to promptly restore the Commission’s longstanding first-to-file approval criterion for registration statements. In simple terms, when the Commission shows favoritism, it results in financial loss for ETP sponsors and makes the ETP marketplace less fair.”
Currently, the SEC is considering numerous applications for ETFs, including those tracking SOL, XRP, and DOGE, along with other assets. Many of these proposals were submitted over the past year in response to an expectation that the Trump administration would adopt a more liberal approach.
Under the Biden administration and following a significant court decision, the SEC authorized the listing and trading of spot Bitcoin ETFs and subsequently spot Ethereum ETFs. The firms argue, however, that in an atypical move, the SEC permitted all spot Bitcoin ETF issuers to list their products on the same day—despite receiving proposals for the 11 different funds at different times. They believe that a return to a first-to-file approach is necessary to prevent market concentration and a “competitive imbalance.”
They further wrote, “The diminished incentive for pioneering product development has wider implications. It restricts investor options, weakens market efficiency, and fundamentally undermines the Commission’s objective of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”
VanEck’s Head of Digital Assets Research, Matt Sigel, previously disclosed to The Block that the firm was the first to file for a Solana ETF in June 2024, in anticipation that the SEC would adopt a more equitable, time-weighted standard for financial product approvals. The SEC has not yet responded to a request for comment.
