On March 11, the Cboe BZX Exchange filed a proposal with the US Securities and Exchange Commission (SEC) to permit Fidelity’s spot Ethereum exchange-traded fund (ETF) to stake its ether holdings.
Staking is a process on Ethereum in which users can stake a certain number of Ether — a minimum of 32 ETH — to support the protocol’s network. Users win rewards in return for securing the network. Ethereum transitioned from the proof-of-work (PoW) mechanism to PoS mechanism during the Merge in 2022 in a bid to move towards a sustainable mechanism.
At first, Fidelity had included the staking proposal in its spot ether fund filing in March 2024. However, as the US regulator went after leading crypto exchanges for alleged securities violations, Fidelity launched the ETF in July 2024 without the staking option.
With the new US administration under President Trump pursuing a pro-crypto policy, Fidelity is now seeking to stake ether held by its fund.
The latest filing mentions that the fund’s sponsor may stake all or a portion of the Trust’s ether on its behalf through one or more staking providers. The sponsor shall maintain sufficient liquidity in the Trust to satisfy redemptions and current liabilities. Any ether staked by the sponsor on behalf of the Trust will consist exclusively of ether owned by the Trust.
The SEC is required to respond to the amendment within 45 days.