Fidelity Drops Staking in Updated Ethereum ETF Application

Fidelity Investments has amended its S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) for its proposed spot Ethereum ETF. The revised application clarifies that the fund will not stake its Ethereum holdings, a change made in response to SEC concerns and regulatory uncertainty surrounding staking activities. This update follows similar actions by other ETF issuers, including Ark Invest, which also removed staking from their applications.

The SEC's heightened scrutiny of staking activities comes in the wake of its lawsuit against Coinbase in June 2023, alleging the platform violated securities laws by providing access to staking. Fidelity's amendment aligns with the SEC's request for Ether ETF issuers to update their 19b-4 filings. This move is seen as a step towards increasing transparency and addressing regulatory concerns. If the SEC approves these amended filings, the funds could begin trading, marking a significant milestone in integrating cryptocurrencies with traditional financial markets. The next important date in this process is May 23, when the SEC will review VanEck's Ether ETF proposal.