Fidelity has amended its filing for the Fidelity Crypto Ethereum Fund (FETH) to potentially stake up to 100% of the ETF’s ether holdings, though the staking program cannot launch until the SEC makes the registration statement effective.
FD Funds Management LLC, which sponsors 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 updated filing includes provisions that would allow the fund to stake as much as its entire ETH portfolio.
The amendment does not register additional securities and updates an earlier S-1 registration statement that the SEC declared effective on July 31, 2025.
Rather than being a routine filing update, the move would add staking rewards to a spot Ethereum ETF that originally launched without the feature. Fidelity’s filing indicates that staking is expected to begin after the registration statement becomes effective, meaning the fund has not started staking yet.
What the FETH Filing Adds
Under the proposed arrangement, FETH would stake ETH through designated custodians and node operators under normal circumstances. The fund would keep some ether available for redemptions, operating expenses and liquidity needs through its Liquidity Program.
The ETF would retain 85% of gross staking rewards, while the remaining 15% would be distributed as a Staking Fee among Fidelity, its custodians and node operators. This charge would come in addition to FETH’s existing 0.25% annual Sponsor fee on its 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 outlines the risks associated with staking, including potential slashing penalties and temporary restrictions on ETH transfers during the staking activation and withdrawal process. To manage possible liquidity constraints, the sponsor could extend redemption settlement periods or meet redemption requests with cash.
Why SEC Effectiveness Is Important
Although an S-3 provides a framework for future securities issuance, submitting the registration statement does not automatically permit FETH to begin staking.
The current filing remains subject to SEC effectiveness, and the prospectus states that shares cannot be sold until that happens. Fidelity similarly describes staking as an activity it plans to begin “as soon as practicable” once the registration statement becomes effective.
The filing indicates that Fidelity is preparing the regulatory disclosures and operational infrastructure ahead of time, allowing FETH to potentially start staking soon after receiving SEC effectiveness rather than beginning the process from scratch.
FETH also plans to distribute net staking rewards to investors in cash on a quarterly basis. However, Fidelity cautions that these distributions are not guaranteed and could be changed or suspended.
The structure highlights an important difference between ETF-based staking and holding ETH directly. While direct Ethereum staking can generate on-chain rewards immediately, an ETF must account for custody arrangements, liquidity, fees, redemptions and regulatory requirements before distributing staking income to investors.
