External ReportingPublicado hace 2 días

Fidelity Files to Let Its Ethereum ETF Stake and Pay Investors

The Boston asset manager's FETH would stake up to 100% of its ETH and distribute the rewards to holders as quarterly cash, pending SEC approval.

Por Jose Antonio LanzPublisher Decrypt 2 min de lectura

Image via Decrypt

Regulation Context

SEC Crypto Asset Market Structure Rulemaking

JurisdictionUnited States

RegulatorSEC

Statusin progress

Updatedhace 6 días

Open Regulation Tracker

Market Context

Ethereum

ETH

$1,877

-0.42% 24h

Layer Index

Neutral

Layer Index

In brief

Fidelity filed a pre-effective amendment on Aug. 11 to let its spot Ethereum ETF, FETH, stake the Ethereum it holds.
The fund would stake up to 100% of its holdings and pay rewards to investors as quarterly cash distributions.
It follows Grayscale and BlackRock, which moved first after a Treasury and IRS safe harbor cleared the path.

Fidelity has asked the SEC for permission to turn its spot Ethereum ETF into a yield-bearing product. The Boston asset manager filed a pre-effective amendment to its registration statement on Aug. 11, adding disclosure that the Fidelity Ethereum Fund (FETH) will stake the ETH it holds.

The change would rewrite the fund's stated objective. FETH currently tracks the Fidelity Ethereum Reference Rate, adjusted for fees. With staking, its goal becomes that index plus an amount based on staking rewards. The filing says the trust is expected to outperform the index before expenses.

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Staking is how Ethereum secures its network: holders lock up Ethereum, which trades as ETH, to help validate transactions and earn new tokens in return. Fidelity would route its ETH through custodians, including Anchorage Digital, BitGo, and Fidelity Digital Assets, to one or more node operators, who run the validator infrastructure.

Under normal conditions the fund could stake up to 100% of its Ethereum, though it isn't required to stake any minimum. Rewards would be split between the node operators, custodians, and Fidelity as fees, with the trust keeping a portion.

Fidelity isn't first. Grayscale became the first U.S. ETF issuer to pay ETH staking rewards to holders, and the SEC has acknowledged BlackRock's proposal to add staking to its ETHA fund. The moves follow a Treasury and IRS safe harbor that let crypto trusts generate staking yield without fear of tax or regulatory blowback.

When the SEC approved spot Ethereum ETFs in 2024, those products pointedly did not allow staking; the lack of rewards has been a drawback ever since.

If approved, FETH would make quarterly cash distributions, converting staked Ethereum into dollars before paying shareholders of record. Fidelity expects the rewards to count as income for tax purposes. But the filing is blunt: distributions aren't guaranteed, and Fidelity can suspend or end them at its discretion.

Staked ETH also carries slashing risk (penalties for misbehaving validators) and can be locked up during unstaking, a liquidity snag the fund plans to manage by extending redemption timelines if needed.

FETH launched with the first U.S. spot Ethereum ETFs in 2024 and charges a 0.25% fee; the staking amendment takes effect only when the SEC declares the registration statement effective.

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