Fidelity has updated its filing for the Fidelity Crypto Ethereum Fund (FETH) to allow the ETF to stake as much as 100% of its ether holdings, although the staking program cannot begin until the SEC registration statement takes effect.
FD Funds Management LLC, the sponsor of 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 amendment adds provisions that would permit the fund to stake up to all of its ETH holdings.
The filing clarifies that it does not register any additional securities and modifies an earlier S-1 registration statement that the SEC declared effective on July 31, 2025.
The update goes beyond a routine registration change. Fidelity is seeking to introduce staking rewards to its spot Ethereum ETF, which launched without a staking component. The filing indicates that staking is expected to begin only after the registration statement becomes effective, meaning the process has not yet started.
What Fidelity’s FETH Amendment Changes
Under the proposed structure, the fund would stake its ether through custodians and node operators during normal operations. Some ETH would remain available for redemptions, expenses and liquidity requirements through what Fidelity refers to as its Liquidity Program.
FETH would keep 85% of the gross staking rewards generated by its ETH holdings. The remaining 15% would be charged as a Staking Fee and distributed among the sponsor, custodians and node operators. This would be separate from the existing 0.25% annual Sponsor fee charged on the fund’s ether holdings.
Anchorage Digital Bank NA, BitGo Bank & Trust and Fidelity Digital Assets, N.A. are identified as custodians for the Trust.
The filing also outlines potential risks associated with staking, including slashing penalties and restrictions on transferring ETH while assets are being activated or withdrawn from staking. Fidelity said it could address potential liquidity delays by extending redemption settlement periods or satisfying redemptions with cash.
Why the Staking Timing Matters
The S-3 registration gives Fidelity the framework for future share issuance, but filing the document does not by itself allow the fund to immediately begin staking.
Because the registration statement is still pending effectiveness, the prospectus states that shares cannot be sold until the registration becomes effective. Likewise, Fidelity describes staking as an activity it intends to begin “as soon as practicable” after effectiveness rather than something currently taking place.
The filing suggests Fidelity is establishing the necessary disclosures and operational structure in advance so FETH can begin staking once the SEC registration becomes effective, rather than having to complete the process afterward.
The fund also plans to make quarterly cash distributions using net staking rewards. However, Fidelity notes that such distributions are not guaranteed and could be changed or suspended.
That distinction is important for investors comparing FETH with direct ETH staking. While direct staking already generates on-chain rewards, an ETF must account for custody, liquidity, fees, redemption procedures and regulatory requirements before passing staking income on to shareholders.
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