Fidelity seeks SEC approval to add staking to Ethereum ETF

Fidelity Investments has filed with the U.S. Securities and Exchange Commission (SEC) to amend its Ethereum exchange-traded fund (ETF) to include staking capabilities.

The proposed changes would allow the Fidelity Ethereum Fund (FETH) to stake a portion of its Ether holdings, with 85% of the staking rewards retained by the fund and the remaining 15% allocated to investors. Distributions to shareholders would occur quarterly in cash, the filing stated.

The move follows growing competition among asset managers to offer staking services within ETF structures, which have historically focused on spot holdings. Staking enables investors to earn rewards by locking up Ether to support the Ethereum network’s proof-of-stake consensus mechanism.

Fidelity’s filing does not specify the exact amount of Ether that would be staked or the expected yield for investors. The proposal is subject to SEC approval, which could take several months to review.

The fund, which launched in November 2024, currently holds Ether directly and does not engage in staking activities. The amendment would represent a significant shift in its operational strategy.

Industry analysts note that staking integration could enhance the fund’s attractiveness to investors seeking yield-generating products in the growing digital asset space. However, regulatory scrutiny remains a key hurdle, particularly given the SEC’s cautious approach to crypto-related financial products.