CBOE’s Bold Move: Staking in Fidelity’s Ethereum ETF

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Ah, the delightful dance of bureaucracy! Cboe BZX Exchange has taken a step towards amending the Fidelity Ethereum ETF, with a fresh filing that could see investors earning additional rewards from staking activities. The year-old ETF may soon feature staking capabilities, much to the delight of those who enjoy a good twist in their investment tales.

A Twist in the Tale: Staking in Fidelity’s Ethereum ETF

In a move that could make even the most stoic investor’s heart flutter, Cboe BZX Exchange has filed a proposal with the US Securities and Exchange Commission (SEC) to amend the Fidelity Ethereum ETF. The new chapter in this saga seeks to introduce ETH staking in the fund, allowing investors to reap additional rewards.

A community reading of the documents reveals that Cboe BZX is seeking the elimination of a clause that specifically bars staking in the ETH. Under the new proposal, Cboe BZX Exchange wants the SEC to approve staking functionalities under certain guidelines.

“The Sponsor may stake, or cause to be staked, all or a portion of the Trust’s ether through one or more trusted staking providers,” read the filing. 📜

Cboe says the application for staking has statutory backing and will ultimately assist the Trust “to better track the returns associated with holding ether.” Ethereum introduced staking in 2022 following its transition from a Proof-of-Work to a Proof-of-Stake consensus mechanism.

Proposed Rules For ETH Staking

According to the 18-page filing document, the ETF’s sponsor pledges to maintain sufficient liquidity for redemption purposes. The document confirms a pledge that the staking activities will not violate the SEC’s standing rules on securities avoiding commingling of funds.

The sponsor will stake ETH to preserve the Trust’s assets and to “generate returns for shareholders. Per the document, the custodian will control private keys for the withdrawal address.

The SEC has 45 days to respond to the proposal with enthusiasts saying that the new forward-thinking approach by the securities watchdog may result in an approval. The recent dismissal of the Kraken case and declaration that memecoins are not securities indicate a changing stance by the SEC.

Ethereum price did not react to the news with the largest altcoin roiling at well under $2,000. Despite whale activity heating up, an Ethereum falling to $1,000 remains a grim possibility. 😱

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2025-03-11 19:13