Fidelity has updated its regulatory filing to pave the way for its Ethereum ETF, FETH, to stake up to 100% of its ETH holdings, although the strategy cannot begin until the SEC declares the registration statement effective.

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

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

Fidelity is effectively seeking to add staking to a spot Ethereum ETF that originally launched without the feature. The filing makes clear that the fund has not yet begun staking and would only do so after the registration statement becomes effective.

FETH Staking Plan

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

The trust would retain 85% of the gross staking rewards generated by its ETH. The remaining 15% would serve as a staking fee shared among Fidelity, the custodians and node operators. This would be charged separately from the existing 0.25% annual sponsor fee applied to the fund’s ether holdings.

The filing identifies Anchorage Digital Bank NA, BitGo Bank & Trust and Fidelity Digital Assets, N.A. as the fund’s custodians.

Fidelity also outlines the potential risks involved with staking, including slashing penalties and temporary transfer restrictions while ETH is being activated or withdrawn from staking. To manage possible liquidity constraints, the sponsor could extend redemption settlement periods or satisfy redemptions with cash.

SEC Effectiveness Is Still Required

The S-3 provides the legal framework for future share issuance, but submitting the registration does not itself give FETH permission to start staking.

Because the filing remains pre-effective, shares cannot be sold until the SEC declares the registration statement effective. Fidelity says it expects to begin staking “as soon as practicable” after that point.

The filing suggests the company is preparing the regulatory and operational framework in advance, allowing FETH to potentially launch its staking program soon after the SEC gives the registration the green light.

FETH also proposes distributing net staking rewards to investors through quarterly cash payments. However, the prospectus says distributions are not guaranteed and could be adjusted or suspended.

The proposal highlights the differences between an Ethereum ETF and direct ETH staking. Direct stakers can already earn network rewards, while an ETF must account for additional regulatory, custody, liquidity and operational requirements before passing those rewards through to investors.