Fidelity filed a pre-effective amendment on Aug. 11 to allow its spot Ethereum ETF, FETH, to stake the Ethereum it holds. The fund could stake up to 100% of its holdings and pay rewards to investors as quarterly cash distributions. The move follows similar steps by Grayscale and BlackRock, enabled by a Treasury and IRS safe harbor. FETH launched with the first U.S. spot Ethereum ETFs in 2024 and charges a 0.25% fee. Distributions are not guaranteed, and staking carries risks of penalties and liquidity constraints during unstaking.
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