Fidelity is seeking to add staking to its Ethereum ETF, filing an amendment that would allow the Fidelity Crypto Ethereum Fund (FETH) to stake up to 100% of its ETH holdings once the SEC registration becomes effective.
FD Funds Management LLC, the fund’s sponsor, 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 update introduces language allowing FETH to stake its entire ether portfolio.
The amendment does not involve the registration of additional securities. Instead, it modifies an earlier S-1 registration statement that the SEC declared effective on July 31, 2025.
The filing represents a significant change for FETH, which launched as a spot Ethereum ETF without a staking component. Fidelity now intends to incorporate staking rewards into the fund, although the filing makes clear that staking cannot begin until the registration statement is declared effective.
How Fidelity Plans to Stake FETH’s ETH
Under the proposed structure, FETH would stake its ether through custodians and node operators. A portion of the fund’s ETH would remain outside staking to support redemptions, cover expenses and maintain liquidity through the fund’s Liquidity Program.
FETH would receive 85% of the gross staking rewards generated by its holdings. The other 15% would be allocated as a Staking Fee among the sponsor, custodians and node operators. The fee would be charged separately from FETH’s existing 0.25% annual Sponsor fee on its ether holdings.
The filing identifies Anchorage Digital Bank NA, BitGo Bank & Trust and Fidelity Digital Assets, N.A. as custodians of the Trust.
Fidelity also details several risks associated with Ethereum staking, including slashing penalties and temporary restrictions on ETH transfers during the activation and withdrawal periods. The sponsor could respond to potential liquidity constraints by extending redemption settlement periods or using cash to meet redemption requests.
Staking Still Depends on SEC Effectiveness
Submitting the S-3 amendment does not immediately give FETH the ability to begin staking. The registration statement must first become effective.
The prospectus states that shares cannot be sold until the registration statement takes effect. Fidelity similarly says it expects to begin staking “as soon as practicable” after effectiveness, indicating that no staking activity has started under the proposed structure.
By establishing the necessary disclosures and operational framework in advance, Fidelity appears to be positioning FETH to begin staking quickly once regulatory requirements are satisfied.
The fund also expects to make quarterly cash distributions from net staking rewards. However, Fidelity says these payments are not guaranteed and could be adjusted or suspended.
The proposed structure would give FETH investors exposure to Ethereum staking rewards without requiring them to stake ETH directly. At the same time, the ETF model introduces additional considerations, including custody, fees, liquidity management and redemption procedures.
