VanEck, 21Shares, and Canary Capital sent a letter to the SEC arguing that the change allows large firms to sit back and let smaller firms do all the hard work. They claim big firms can copy those ideas and launch simultaneously, creating an unfair marketplace.
VanEck, 21Shares, and Canary Capital urged the SEC to approve ETF filings in the order they come in
Source Cryptopolitan
VanEck, 21Shares, and Canary Capital have asked the US Securities and Exchange Commission (SEC) to return to the ‘first-to-file’ principle for exchange-traded fund (ETF) approvals. The companies say the current method favors larger firms and harms fair competition.
The three organizations sent a formal letter to SEC Chairman Paul Atkins, saying that disregarding the “first-to-file” method weakens investor protection, limits innovation, and creates an uneven playing field.
VanEck shared a letter in an X post. The ETF issuers state that restoring the rule would reaffirm the SEC’s commitment to “nurturing a vibrant and competitive financial marketplace.
SEC favoritism undermines innovation in the ETF market. pic.twitter.com/HM7P2Dm0XP
— VanEck (@vaneck_us) June 6, 2025
ETF issuers say approving all at once blocks small firms from leading
The “first-to-file” rule ensured that the SEC approved applications to launch an ETF in the exact order they were received. This procedure allowed smaller firms to compete by being first to market.
If a company created a new product, filed the paperwork early, and followed all the rules, it would typically get approval first. This would boost innovation and competition by rewarding those who worked quickly and creatively instead of waiting to copy others.
The old system helped small or mid-sized ETF issuers build trust with investors. They gained visibility, collected assets under management (AUM), getting ahead of larger companies.
However, the SEC dropped that process and started approving applications simultaneously, even when some companies had applied much earlier than others.
In January 2024, the SEC approved several spot Bitcoin ETFs, all on the same day. They overlooked companies like VanEck, which had already filed years ago and should have been given priority. VanEck was grouped with later files like BlackRock, which got the largest share of the Bitcoin ETF market because of its strong brand and wide investor base.
When every fund launches on the same day, smaller firms won’t benefit from being first to market, making it harder to compete and grow their funds.
They added that changing the policy undermines the SEC’s mission to protect investors and maintain fair, efficient markets, weakening the financial system.
ETF sponsors warn SEC’s move could limit investor choices and weaken US innovation
In the letter, the issuers mentioned Bitcoin Futures ETFs in 2021 as an example, where the SEC gave ProShares just a three-day lead, which allowed the company to grab over 90% of the market share.
Another example was the approval of Spot Ethereum ETFs, where the SEC again approved all applications at once. This seemed unfair since some companies had submitted theirs much earlier and invested more time and resources in developing them.
This behavior continues today with the current delays in decision-making for altcoin ETFs, such as those linked to Solana, XRP, and Sui. This makes it more likely that latecomers will benefit from a grouped approval process.
The ETF issuers also acknowledged how the staff at the SEC have to deal with a heavy workload that involves reviewing each application in detail because the number of filings has risen recently.
However, they said the SEC should not stop using the first-to-file rule just because the staff is busy. They suggested that the agency could make the review process faster by using clear, standard steps while still respecting the exact dates each company first filed its application.
The letter also pointed to the flood of crypto ETF filings that began shortly after President Donald Trump returned to office. By connecting their request to these broader developments, the firms showed that the issue lies in how the approval framework treats innovation and timing.
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