Fidelity, an investment management company, has revised its application for a spot Ether exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC).
Fidelity's updated S-1 filing excludes staked Ether from its ETF, aligning with SEC registration requirements for US financial products.
This change follows reports that the SEC, potentially influenced by political pressures, is reconsidering its stance on spot Ether ETFs and has asked issuers to update their 19b-4 filings.
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The next key date is May 23, when the SEC will decide on VanEck’s Ether ETF proposal. Eric Balchunas, senior ETF analyst at Bloomberg, has raised the approval chances for the 19b-4 form to 75%.
However, Bloomberg analyst James Seyffart noted:
We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live ETH ETF.
The SEC has had a complex relationship with Ether, particularly following Ethereum’s shift to a Proof-of-Stake (PoS) mechanism, as SEC Chair Gary Gensler has suggested that cryptocurrencies allowing staking might be considered securities. This has sparked debates about the regulatory status of staked Ether.
Alex Thorn, head of research at Galaxy Research, suggested that the SEC might classify staked Ether as a security despite potential approvals for Ether ETFs.
Fidelity submitted its S-1 application on March 27, with plans to stake part of the fund's Ether. This strategy pointed out potential risks, including "slashing penalties" and liquidity issues during staking.
The decision to exclude staking from the revised filing shows Fidelity’s effort to align with regulatory expectations and avoid the risks of staking.
In other news, VanEck's CEO Jan van Eck has previously expressed doubts that the firm's spot ETH ETF will be approved.
