Fidelity Files Plan to Put All Ethereum ETF Holdings to Work

Fidelity is moving to introduce staking into its Ethereum ETF, with a new filing seeking permission for the Fidelity Crypto Ethereum Fund (FETH) to stake up to 100% of its ETH holdings once the SEC registration takes effect.

FD Funds Management LLC, the sponsor of FETH, submitted a pre-effective amendment to its Form S-3 registration statement with the U.S. Securities and Exchange Commission on July 24, 2026. The amendment includes provisions that would allow the fund to stake its entire ether holdings.

The filing does not seek to register additional securities. Instead, it updates a previous S-1 registration statement that the SEC declared effective on July 31, 2025.

The move would add staking rewards to FETH, which launched as a spot Ethereum ETF without staking capabilities. However, Fidelity cannot start staking until the amended registration statement becomes effective.

FETH Staking Structure

Under the proposed setup, FETH would stake ETH through custodians and node operators. The fund would keep part of its ether available for redemptions, expenses and liquidity requirements through its Liquidity Program.

FETH would retain 85% of the gross rewards generated through staking. The remaining 15% would be treated as a Staking Fee and shared among Fidelity, its custodians and node operators. This fee would be charged separately from the existing 0.25% annual Sponsor fee on the fund’s ether holdings.

The filing names Anchorage Digital Bank NA, BitGo Bank & Trust and Fidelity Digital Assets, N.A. as custodians for the Trust.

Fidelity also warns of risks associated with staking, including slashing penalties and temporary restrictions on transferring ETH while assets are being activated or withdrawn. To handle potential liquidity issues, the sponsor could extend redemption settlement periods or use cash to fulfill redemption requests.

Staking Awaits SEC Effectiveness

Filing the amendment does not automatically authorize FETH to begin staking. The registration statement must first be declared effective by the SEC.

The prospectus states that shares cannot be sold until the registration becomes effective. Fidelity also says it intends to begin staking “as soon as practicable” after that point, confirming that staking is not currently underway.

The filing allows Fidelity to establish its regulatory disclosures and operational framework in advance, potentially enabling FETH to launch staking soon after the registration receives SEC effectiveness.

The fund also plans to make quarterly cash distributions from net staking rewards, although Fidelity says these payments are not guaranteed and could be modified or suspended.

If implemented, the arrangement would allow FETH investors to earn a portion of Ethereum’s staking rewards through an ETF structure. Unlike direct ETH staking, however, the ETF model involves additional custody, fee, liquidity and redemption considerations.