VanEck Pushes to Launch First Spot Ethereum ETF

VanEck, a leading investment management firm, aims to be the first to issue a spot Ethereum (ETH) ETF and urges the SEC to avoid simultaneous approvals. The SEC is set to decide on VanEck’s ETF application on May 23. On May 22, Matthew Sigel, VanEck’s Head of Digital Assets Research, stated that the firm should launch its spot Ethereum ETF before its competitors.

Speaking with The Block, Sigel highlighted that VanEck was the first to file its S-1 registration statement and expects to receive feedback before proceeding. He argued that filing first “used to mean something” before the US government started “picking winners.” Sigel urged the SEC to “respect the queue” and let the first filer launch first.

Sigel noted that the SEC’s simultaneous approval of all spot Bitcoin ETFs did not stop it from “choosing winners.” Certain funds have significantly more assets under management (AUM) despite simultaneous approvals, showing that some funds still had an advantage.

Sigel mentioned that VanEck does not plan to engage in legal battles if the SEC rejects its application, but expects other court cases to resolve the issue. He also emphasized on social media that a first-come, first-served approach helps issuers plan product launches. Waiting for approvals forces early filers to update their applications more often, increasing costs and legal fees.

The SEC’s decision on VanEck’s spot ETH ETF application is expected on May 23, the first of several similar applications awaiting approval. Expectations around the approval process have shifted due to VanEck’s stance. David Han, a research analyst at Coinbase Institutional, noted on May 15 that the SEC is not required to approve products at the same time. He cited SEC Commissioner Mark Uyeda, who claimed that the SEC hides its anti-first-mover bias.

Others suggest that a longer approval process may be due to different reasons. Nate Geraci, President of ETF Store, said the SEC might approve 19b-4 filings first and then gradually address S-1 registration statements. Bloomberg ETF analyst James Seyffart believes that after initial 19b-4 approvals, it might take weeks or longer for companies to launch their ETH ETFs.

The main issue is the timing of approvals and its impact on the market. Sigel argues that the first filer should launch first, ensuring fairness. However, the SEC’s simultaneous approval approach aims to avoid market disruption and provide equal opportunities to all applicants.

Critics of simultaneous approvals argue that it still creates market disparities. Funds with better marketing, distribution, or timing might still dominate, leading to unequal asset accumulation. Sigel’s view is that respecting the filing order would reduce these disparities, giving each firm a fair chance to launch without unnecessary delays and costs.

As the SEC’s decision on VanEck’s spot Ethereum ETF application approaches, the discussion on the approval process raises important questions about regulatory practices and market fairness. VanEck’s push to be first reflects the competitive nature of the ETF market and the significant impact regulatory decisions can have. Whether the SEC will follow a first-come, first-served principle or continue with simultaneous approvals is yet to be seen, but the outcome will shape the future of cryptocurrency ETFs in the US.