- Material impact on Bitcoin and Ethereum ETF launches.
- VanEck highlights unfair market advantages.
- Early filer advantages potentially eliminated.
VanEck, 21Shares, and Canary Capital have urged the SEC to reinstate the first-to-file rule for cryptocurrency ETFs, citing concerns about fairness and competition. The firms emphasized that simultaneous approvals favor latecomers like BlackRock over early filers.
Regulatory Impact on Market Dynamics
Reinstating the first-to-file rule by the SEC could reshape ETF approval processes, promoting competitive fairness. The absence of this rule has allowed latecomers to dominate, risking innovation and market diversity.
Industry Reactions
The push for the SEC to apply the first-to-file rule comes amid criticism of its simultaneous approvals approach. VanEck, 21Shares, and Canary Capital argue this system favors larger entities despite their later applications.
VanEck’s letter criticized the SEC’s approval method, which enables later applicants like BlackRock to secure dominant market positions. Such practices could undermine competitive balance and discourage smaller innovators from filing early.
“When the Commission plays favourites, it costs ETP sponsors money and makes the ETP marketplace less fair.” — Nathaniel Karp, Chief Executive Officer, VanEck
The SEC’s current strategy of approving crypto ETFs simultaneously has led to market imbalances. BlackRock rapidly captured significant market shares in both Bitcoin and Ethereum ETFs, challenging early applicants’ competitive edges.
Financial outcomes may include reduced incentives for early applications, as evidenced by BlackRock’s swift market gains. Political and regulatory responses might adjust, but perspectives vary on potential changes. BTC and ETH ETFs remain pivotal, with broader market implications.
Dialogue continues as industry leaders assess SEC procedural impacts on crypto product innovation. The ongoing debate highlights the need for considering chronological approval benefits versus equitable market practices, shaping future regulatory frameworks.
