VanEck, 21Shares Urge SEC to Prioritize Crypto ETF Filings
Asset Managers Push for 'First-to-File' Crypto ETF Approval
Three prominent asset managers—VanEck, 21Shares, and Canary Capital—have jointly petitioned the Securities and Exchange Commission (SEC) to revert to its traditional "first-to-file, first-to-approve" policy for cryptocurrency exchange-traded products (ETPs).
Concerns Over Simultaneous Approvals
Their letter, published on VanEck's X account on June 6th, criticizes the SEC's recent shift towards simultaneous approvals. This approach, they argue, disadvantages smaller firms and hinders innovation within the $15.4 trillion US ETF market.
The firms highlight the Bitcoin futures ETF launch in late 2021, where ProShares captured over 90% market share with a mere three-day lead. Similarly, the simultaneous approval of spot Bitcoin ETPs on January 10, 2024, saw larger firms dominate despite filing later.
"When the Commission plays favorites, it costs ETP sponsors money and makes the ETP marketplace less fair," the companies stated.
The letter emphasizes that simultaneous approvals incentivize imitation over genuine innovation, discouraging the substantial investments needed to develop truly novel products.
"This significant regulatory shift away from a first-to-file approval principle adversely affects market dynamics. It incentivizes replication rather than original innovation, thereby discouraging the considerable investment necessary to develop genuinely innovative products."
Impact on Early Filers
VanEck and 21Shares were early filers for Bitcoin and Ethereum spot ETFs, significantly contributing to the US market's access to digital assets. Following these approvals, along with Canary Capital, they promptly filed applications for alternative crypto asset ETFs. Canary Capital, specifically, has pushed for ETFs tracking assets like TRON (TRX) and Cronos (CRO).
The SEC's current practice, however, raises concerns that future altcoin ETF approvals, such as those potentially involving Solana, XRP, and Litecoin (with Bloomberg Intelligence predicting 90% and 85% approval odds for Litecoin and XRP, respectively, this year), could also be granted simultaneously, negating the advantage of early filing.
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