Leading crypto asset managers VanEck, 21Shares, and Canary Capital have formally petitioned the SEC to reinstate its ‘first-to-file’ principle for ETF approvals, highlighting growing tensions between industry innovators and regulators. This development comes amid increasing institutional interest in crypto products, as evidenced by recent surges in institutional crypto adoption driven by SEC clarity.
Key Points of the Asset Managers’ Petition
- Joint letter submitted to SEC Chairman Paul Atkins on June 5, 2025
- Request to restore chronological review of ETP applications
- Concerns over market fairness and innovation stifling
- Impact on $15.4 trillion ETP industry growth
Why the First-to-File Principle Matters
The first-to-file principle has historically served as a cornerstone of fair market competition in the ETF space. Under this system, firms that invested early in innovation were rewarded with first-mover advantages, creating a merit-based marketplace that fostered creativity and competition.
Impact of SEC’s Current Approach
The SEC’s shift to simultaneous approvals, as seen with recent Bitcoin and Ethereum spot ETFs, has created several market challenges:
- Reduced incentive for innovation
- Advantage to larger asset managers
- Potential market consolidation
- Decreased competition
Industry Expert Perspectives
‘The first-to-file principle enabled the ETP industry to grow to $15.4 trillion in investor assets. Newer, innovative companies like Wisdomtree have been able to become industry leaders.’ – Joint statement from VanEck, 21Shares, and Canary Capital
Market Implications
The current total crypto market capitalization stands at $3.22 trillion, with recent daily gains of 2.41%. This regulatory discussion comes at a crucial time for the crypto market, potentially impacting future product innovations and market access.
Frequently Asked Questions
What is the first-to-file principle?
A regulatory approach ensuring ETF applications are reviewed and approved in the order they are submitted.
Why did the SEC change its approach?
The SEC adopted simultaneous approvals to streamline the review process and manage staff workload more efficiently.
How does this affect retail investors?
The change could impact product innovation and variety available to retail investors in the crypto ETF market.
What’s next for crypto ETF regulation?
The SEC’s response to this petition could set important precedents for future crypto product approvals and market innovation.
