Fidelity Investments has moved to let its spot Ethereum exchange-traded fund, the Fidelity Ethereum Fund (FETH), stake up to 100% of its ether holdings under normal circumstances, according to a pre-effective amendment to its Form S-3 registration statement filed with the U.S. Securities and Exchange Commission on July 24, 2026. The filing updates a prior S-1 that the SEC declared effective on July 31, 2025, and is designed to attach ETH staking rewards to a spot Ethereum ETF that launched without that feature.
Under the proposed framework, the Trust may keep a portion of its ether un-staked for redemptions, expenses, and its Liquidity Program, while allocating the remainder to staking through named custodians and node operators. The fund would retain 85% of gross staking rewards, while 15% would be paid as a Staking Fee split among the sponsor, custodians, and node operators. That is on top of the existing 0.25% annual Sponsor fee on Ether Holdings. Custodians named in the filing are Anchorage Digital Bank NA, BitGo Bank & Trust, and Fidelity Digital Assets, N.A.
The filing stresses staking is not yet active. Shares 'may not be sold until the registration statement becomes effective,' and staking is described as an action the sponsor expects to take 'as soon as practicable' after that point rather than one already underway. Fidelity also plans quarterly cash distributions funded by net staking rewards, but the prospectus warns that distributions are not guaranteed and may be modified or suspended.
Market context: as of Aug. 11, FETH had attracted about $2.13 billion in cumulative net inflows since its July 2024 launch, according to Farside Investors. The fund holds more than 480,000 ETH worth roughly $880 million. The proposed staking feature would position FETH against competitors including Grayscale, which became the first U.S. issuer to allow staking in spot crypto exchange-traded products in October 2025; BlackRock, which launched its iShares Staked Ethereum ETF in February 2026; and Bitwise, which withdrew a staking plan for its Ethereum ETF in September 2025.
The prospectus also flags standard staking risks, including slashing penalties and temporary transfer restrictions during activation and exit. To manage those risks, the sponsor may extend redemption settlement timelines or pay redemptions in cash.
