VanEck, 21Shares, and Canary Urge SEC to Restore First-to-File ETF Approval Process

Highlights:

• ETF issuers are calling on the US SEC to return to the traditional first-to-file, first-to-approve system.
• Approving multiple ETFs at once puts smaller firms at a significant disadvantage.
• SEC’s move away from first-to-file approval sparks fairness and competition concerns, the firms emphasized.

Exchange-traded fund (ETF) issuers Canary Capital, 21Shares, and VanEck have submitted a letter to the United States Securities and Exchange Commission (SEC), requesting the reinstatement of its traditional “first-to-file, first-to-approve” policy for ETF applications. The letter, shared on VanEck’s official X account on June 6, highlights concerns about the SEC’s recent shift away from its usual practice of approving exchange-traded products (ETPs) based on the order of filing. 

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SEC favoritism undermines innovation in the ETF market. pic.twitter.com/HM7P2Dm0XP

— VanEck (@vaneck_us) June 6, 2025

ETF Issuers Say SEC’s Approval Shift Hurts Innovation and Favors Big Firms

According to the ETF issuers, the new practice of approving multiple applications at once has created an uneven playing field. They argue that this change places smaller firms at a disadvantage and limits innovation within the $15.4 trillion US ETF industry. The companies said favoritism by the Commission makes ETP sponsors lose money and the market unfair. They said the change began in October 2021, when ProShares received a three-day head start in launching their Bitcoin Futures Fund, allowing them to capture over 90% of the market and marking a shift from the traditional first-to-file approval process.

The letter also mentioned the simultaneous approval of spot Bitcoin ETPs on Jan. 10 last year. A trio of cryptocurrency fund managers said despite some firms filing later, the largest companies ended up controlling most of the market. They emphasized that this big change in rules, moving away from first-to-file approval, hurts the market in many ways. It makes copying old products easier and stops people from trying to create new ideas. This can lower the drive to invest in real innovation.

 The letter reads:

“The reduced incentive for pioneering product development has broader implications. It diminishes investor choice, compromises market efficiency, and fundamentally undermines the commission’s mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.”

Concerns Rise Over SEC Moving Away from First-to-File Approach

Last year, the regulator approved all 11 spot Bitcoin ETFs at the same time. The SEC ignored the application order and, months later, applied the same approach to spot Ethereum ETFs.They approved all active applications together, no matter when they were filed. 

After US President Donald Trump took office, filings for digital asset ETFs increased rapidly. Asset managers and crypto companies moved quickly to seek approval, hoping for friendlier regulations in the United States. The SEC is now reviewing dozens of ETF applications, including those tracking assets like SOL, XRP, and DOGE. Many of these filings came in during the past year, as companies anticipated the agency would take a more lenient approach under the Trump administration. 

The asset managers are concerned that the SEC’s recent actions suggest that if it approves more crypto ETPs, it may again choose to approve them all at once instead of following the first-to-file order. This could affect how future crypto ETFs are approved. They stated that returning to a first-to-file approach is necessary to prevent market concentration and avoid creating a “competitive imbalance.”

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