Fidelity asked the SEC to let its $898 million Ethereum fund stake up to all of its ether and pay shareholders cash every quarter, with 15% of gross rewards going to the sponsor, custodians and node operators.
- Fidelity asked federal regulators to let it stake the ether inside its $898 million Ethereum fund and pay shareholders cash four times a year.
- The fund would keep 85% of gross staking rewards. The other 15% goes to the sponsor, the custodians and the outside firms that run the validators.
- The filing names no start date. Fidelity also gave no estimate of what holders would actually earn.
Fidelity Investments moved to stake as much as 100% of the ether sitting in the Fidelity Ethereum Fund (FETH) and hand the proceeds back to shareholders as quarterly cash.
The asset manager set no minimum staking threshold in its amended registration statement filed with the U.S. Securities and Exchange Commission, which means the entire position could sit with validators “under normal conditions.” The trust would hold back some ether for redemptions, expenses and other liquidity needs. FETH carries $898 million in net assets.
Fidelity Plans to Add Staking and Quarterly Cash Distributions to Nearly $900M Ether ETF
— Wu Blockchain (@WuBlockchain) August 12, 2026
Fidelity plans to add ETH staking and quarterly cash distributions to the Fidelity Ethereum Fund (FETH), which has $898 million in net assets. Under normal conditions, the fund may stake up… pic.twitter.com/xP5tcDlR6v
The 15% skim is the number holders will feel
The fund would retain 85% of gross staking rewards. The remaining 15% is split among the fund sponsor, the custodians and the trust’s node operators, named in the filing as Blockdaemon, Figment and Galaxy. Net rewards then cover fund expenses first, and only what survives that reaches shareholders.
The plumbing exists because of a tax decision. The Internal Revenue Service issued a safe harbor in November 2025 that lets qualifying crypto trusts stake without forfeiting grantor-trust status. That same guidance requires net staking rewards to go out at least quarterly, which is what sets the payment schedule.
Cash out of a crypto ETP has precedent. VanEck’s Avalanche fund declared a cash payout of its own earlier this year.
Two ways to bolt yield onto an ether fund
Grayscale and 21Shares added staking to funds that already existed, the route Fidelity picked. BlackRock built a separate vehicle instead, launching a staked ether ETF in March 2026 that opened with $100 million in assets and traded more than $15 million on its first day.
That product now holds $577 million in net assets, against $5.6 billion in BlackRock’s flagship ether fund, according to SoSoValue.
Staking a fund this size drags custody and validator arrangements into view. That is the same terrain where Morgan Stanley and Coinbase set ether and Solana ETF custody terms, and where Anchorage Digital added support for Lido’s wstETH.
The filing leaves plenty open. It does not say when staking begins, what the net yield looks like after the 15% cut and fund expenses, how much ether stays unstaked to cover redemptions, or who absorbs a validator slashing loss.
It also does not say the SEC has cleared any of this. An amendment is a request, and as of press time it remains one.
Holders already in FETH can read the amended prospectus for the reward split and the distribution mechanics, and can watch the trust’s EDGAR page for an effective date, before the change touches their position.
One line explains how the cash actually shows up. If rewards fall short, the fund may sell ether to fund the distribution, which means a quarterly check can arrive carved out of the asset shareholders bought in the first place.
