Fidelity’s latest S-1 filing with the U.S. Securities and Exchange Commission (SEC), filed early Tuesday, reveals that the firm has abandoned plans to contribute Ether (ETH) holdings to a proposed spot exchange-traded fund (ETF).
According to updated filings, Fidelity's proposed ETF will feature unstaked Ethereum tokens. This update is part of broader regulatory developments, with the SEC recently changing its stance on Spot Ether ETFs. According to industry reports, this change may be influenced by political factors, with the SEC revising its previous opinion and requiring ETF issuers to amend their 19b-4 filings accordingly. There is.
Given its significant impact on the cryptocurrency market, the investment community is currently eagerly awaiting the SEC's decision on the VanEck Ether ETF proposal, which is due to expire on May 23. Bloomberg ETF analyst James Seifert notes that approval of the S-1 filing remains a key hurdle for Ether ETF issuers.
Fidelity has filed an amended S-1 application for the Ethereum ETF with the US SEC following reports that the SEC is requiring potential ETF issuers and exchanges to update their documents.
The asset management company has updated its filing to clarify that the ETH tokens underlying the ETF will not be staked. Fidelity's adjustments come amid speculation that the SEC will approve an Ethereum ETF under political pressure, as an S-1 filing is required to launch an ETF in the United States.
Despite the potential for ETF approval, staked ETH could still be classified as a security, especially given the SEC's previous considerations regarding ETH. Furthermore, Ethereum's transition to proof-of-stake (PoS) may also be factored into the SEC's deliberations.
Bloomberg senior ETF analyst Eric Balciunas has taken a turn and revised the odds of SEC approval for these ETFs to 75%, up from the original 25%. This change signals increased confidence in U.S. regulatory approval of crypto investment products.
Fidelity's first S-1 filing with the SEC on March 27 highlighted its plans to invest a portion of its Ethereum (ETH) holdings, despite the inherent risks. These include potential loss of funds due to “slash penalties” and liquidity issues during the staking process. Additionally, staking rewards are considered taxable income and create a taxable event for investors even without actual distribution of funds.
