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Fidelity Revises Ether ETF Filing, Excludes ETH Staking

Key Takeaways

  • Fidelity has revised its Ether ETF application to exclude staking;
  • SEC approval of Ether ETFs remains uncertain, with potential delays for S-1 filing approvals;
  • The SEC's stance on staked Ether as a security continues to create regulatory challenges.
Fidelity Revises Ether ETF Filing, Excludes ETH Staking

Fidelity, an investment management company, has revised its application for a spot Ether exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC).

Fidelity's updated S-1 filing excludes staked Ether from its ETF, aligning with SEC registration requirements for US financial products.

This change follows reports that the SEC, potentially influenced by political pressures, is reconsidering its stance on spot Ether ETFs and has asked issuers to update their 19b-4 filings.

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The next key date is May 23, when the SEC will decide on VanEck’s Ether ETF proposal. Eric Balchunas, senior ETF analyst at Bloomberg, has raised the approval chances for the 19b-4 form to 75%.

However, Bloomberg analyst James Seyffart noted:

We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live ETH ETF.

The SEC has had a complex relationship with Ether, particularly following Ethereum’s shift to a Proof-of-Stake (PoS) mechanism, as SEC Chair Gary Gensler has suggested that cryptocurrencies allowing staking might be considered securities. This has sparked debates about the regulatory status of staked Ether.

Alex Thorn, head of research at Galaxy Research, suggested that the SEC might classify staked Ether as a security despite potential approvals for Ether ETFs.

Fidelity submitted its S-1 application on March 27, with plans to stake part of the fund's Ether. This strategy pointed out potential risks, including "slashing penalties" and liquidity issues during staking.

The decision to exclude staking from the revised filing shows Fidelity’s effort to align with regulatory expectations and avoid the risks of staking.

In other news, VanEck's CEO Jan van Eck has previously expressed doubts that the firm's spot ETH ETF will be approved.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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