Firms VanEck, 21Shares, and Canary Capital have appealed to the SEC to restore the first-to-file rule for crypto ETFs, pointing out fairness and competitive risks.
Regulatory Impact on Market Dynamics
Reinstating the first-to-file rule could reshape the ETF approval process, promoting competitive fairness. The absence of this rule has allowed latecomers to dominate the market, risking innovation and diversity.
Industry Reactions
The call for the SEC to reinstate the first-to-file rule has been met with criticism of its simultaneous approval process. VanEck criticized the SEC's approval method that allows later applicants like BlackRock to secure dominant market positions.
> "When the Commission plays favorites, it costs ETP sponsors money and makes the ETP marketplace less fair." — **Nathaniel Karp, Chief Executive Officer, VanEck**
Conclusion and Future Perspectives
The absence of the first-to-file rule has led to market imbalances, allowing BlackRock to rapidly capture significant market shares in Bitcoin and Ethereum ETFs, challenging early applicants' competitive edges. Discussions on potential regulatory changes continue, with current conditions potentially impacting innovation in crypto products.
The topic of reinstating the first-to-file rule remains relevant as industry leaders continue to assess the impact of SEC procedures on innovation in crypto products.
