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Exchange-traded fund (ETF) creators VanEck, 21Shares and Canary Capital dispatched a correspondence to the US Securities and Exchange Commission (SEC) advocating for a reinstatement of the “first-to-file” doctrine for approving ETF proposals in the sequence they were presented to the authority.
The firms contended that by not adhering to the first-to-file principle, which was the default approval process prior to the arrival of crypto ETFs, the SEC undermines healthy rivalry and obstructs financial innovation. The letter states:
“The diminished motivation for innovative product development carries wider consequences. It limits investor options, impedes market efficiency, and essentially jeopardizes the commission’s objective of safeguarding investors, ensuring fair, orderly, and efficient markets, and promoting capital formation.”
“The ongoing global prominence of the United States in financial innovation is closely tied to regulatory frameworks that proactively nurture and reward entrepreneurship, creativity, and authentic innovation,” the letter further articulates.
Digital asset ETF submissions surged after the inauguration of US President Donald Trump, as asset managers and crypto firms hurried to secure approval for new investment vehicles, anticipating a more favorable regulatory environment in the US.
Related: SEC poised to shape crypto policy through ‘notice and comment,’ asserts Atkins
SEC postpones decisions on staking, altcoin ETFs as applications surge
Despite the growing institutional interest in altcoin and staking ETFs, and the rising number of ETF submissions, the SEC has postponed its decisions on various altcoin and crypto-staking ETFs.
In May, the authority delayed its verdict on the listing of Grayscale’s spot Solana (SOL) Trust ETF until October.
SEC representatives also postponed the sanction of staking and XRP (XRP) ETFs in May, a development that did not surprise market analysts.
“The SEC commonly utilizes the full duration to respond to a 19b-4 submission,” Bloomberg ETF analyst James Seyffart remarked in a May 20 X post.
“Virtually all of these submissions have final due dates in October. Early verdicts are atypical,” the analyst added.
Furthermore, the SEC recently reacted to the effective registration statements for the REX-Osprey staked ETFs, expressing concerns that the investment vehicles might not qualify as ETFs because of the underlying fund’s business structure.
This resulted in a delay in the ETF introduction even though numerous analysts predicted that the effective registration statements indicated forthcoming launches of these investment products.
Magazine: SEC’s reversal on crypto leaves significant questions unresolved
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