VanEck, 21Shares, and Canary Urge SEC to Approve Bitcoin ETF in Compelling Letter

Crypto ETF Issuers Demand Fairer Approval Process from SEC

Established Firms Accused of Exploiting Regulatory Loopholes

Three prominent financial firms—VanEck, 21Shares, and Canary Capital—have publicly challenged the U.S. Securities and Exchange Commission (SEC) over what they describe as preferential treatment toward larger, more established crypto ETF issuers.

In a letter obtained by industry analyst James Seyffart, the firms claim the SEC has moved away from its previous "first-to-file, first-to-approve" policy, which once gave early applicants a competitive edge in launching Bitcoin and Ethereum ETFs. Instead, the regulator has adopted an unclear new approach that smaller issuers argue stifles innovation and market competition.

Smaller Firms Struggle to Keep Up

The letter highlights how the SEC's current practices create significant barriers for smaller or newer firms, allowing dominant players to capture most investor capital and control the market. This dynamic, the firms warn, limits the availability of potentially superior ETF products that could offer better returns and risk management options.

Investors have long sought a wider variety of crypto ETF choices, but the SEC's opaque approval process may discourage new entrants from developing innovative products—ultimately restricting investor options.

A Call for Fairness and Transparency

The issuers are urging SEC Chairman Paul Atkins to implement a more transparent and equitable approval system. Such reforms could level the playing field, encouraging competition and fostering new ETF innovations.

While the SEC has not yet responded, Commissioner Hester Peirce—a known advocate for clearer crypto regulations—has taken notice. If the SEC addresses these concerns, it could lead to a more dynamic ETF market, benefiting both investors and the broader crypto ecosystem.

Spot ETF Landscape Remains Mixed

Meanwhile, existing spot Bitcoin and Ethereum ETFs continue to show inconsistent performance. BlackRock's BTC ETF, previously a leader in inflows, saw no new investments in the past day—highlighting the ongoing volatility in the sector.

As the industry awaits the SEC's next steps, the push for a fairer approval process is gaining momentum, with significant implications for the future of crypto investment products in the U.S.