Fidelity has taken another step toward adding staking to its Ethereum ETF, filing an amendment that would allow the Fidelity Crypto Ethereum Fund (FETH) to stake as much as 100% of its ETH holdings once its SEC registration becomes effective.

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

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

The proposed change would bring staking rewards to FETH, which launched as a spot Ethereum ETF without staking capabilities. However, Fidelity cannot begin the program until the updated registration statement is declared effective.

How FETH’s Staking Structure Would Work

Under the proposed framework, the fund would stake ETH through its custodians and selected node operators. Fidelity would keep some ether outside staking to meet redemption requests, cover expenses and maintain liquidity through its Liquidity Program.

FETH would retain 85% of the gross staking rewards generated by its ETH holdings. The remaining 15% would serve as a Staking Fee shared among the sponsor, custodians and node operators. This fee would be separate from the fund’s existing 0.25% annual Sponsor fee on Ether Holdings.

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

Fidelity also highlights risks linked to staking, including slashing penalties and temporary limits on transferring ETH during the activation and withdrawal processes. If staking creates liquidity constraints, the sponsor could extend redemption settlement periods or use cash to satisfy redemption requests.

SEC Approval Remains the Key Hurdle

The filing itself does not allow FETH to immediately begin staking. The registration statement must first become effective.

The prospectus says shares cannot be sold until the registration becomes effective. It also states that Fidelity expects to begin staking “as soon as practicable” afterward, indicating that staking has not yet commenced.

By putting the required disclosures and operational arrangements in place ahead of time, Fidelity is positioning the ETF to launch its staking program once the SEC registration takes effect.

FETH could also distribute net staking rewards to shareholders in cash on a quarterly basis. Fidelity cautions, however, that such distributions are not guaranteed and could be changed or suspended.

If implemented, the structure would allow investors to gain exposure to Ethereum staking rewards through an ETF rather than staking ETH themselves. However, the arrangement also brings additional considerations involving custody, fees, liquidity and redemption management.