ETC Group executive praises addition of ETF staking as a favorable progression

The inclusion of staking in Ethereum exchange-traded fund (ETF) applications is seen as a significant milestone, according to an executive at European investment firm ETC Group. Chanchal Samadder, head of product at ETC Group, explained that the Ethereum staking aspect is crucial because it determines whether investors receive the price return or the total return of the asset. This concept is similar to dividends in equities, where only shareholders who exercise their voting rights are eligible to receive dividends. However, despite the optimism surrounding the addition of staking, the approval of spot Ethereum ETFs by the Securities and Exchange Commission (SEC) remains uncertain. Samadder highlighted the high level of new risks and difficulty associated with staking products, as well as the need for deep knowledge about the Ethereum blockchain. He warned that issuers lacking familiarity with the technical aspects of the Ethereum protocol and expertise in exchange-traded products could potentially harm investor outcomes. Several spot Ethereum ETF filers, including Fidelity and Grayscale Investments, have sought to amend their SEC applications to include staking. However, Samadder speculated that the complexity of staking and the SEC’s requirements may have deterred applicants from including it in their initial filings. He also suggested that the SEC may not have been prepared to properly analyze the risks associated with staking.