Fidelity Removes Staking Feature from Spot Ethereum ETF Amid Regulatory Scrutiny

Fidelity Removes Staking Feature from Spot Ethereum ETF Amid Regulatory Scrutiny

Several crypto ETF issuers are reportedly scrambling to amend SEC filings as the likelihood of approved spot Ethereum products has increased in the past 24 hours.

Wall Street giant Fidelity recently submitted an updated spot Ethereum ETF S-1 form with the U.S. SEC, removing all staking-related language. This move indicates ongoing dialogue with the regulator. Multiple reports have also surfaced, suggesting that the SEC has instructed other issuers and national exchanges, like Nasdaq, to expedite improved spot Ether (ETH) ETF filings ahead of potential partial approvals.

At press time, had yet to receive responses from exchanges and providers on the matter.

Fidelity’s amended S-1 form may reflect the SEC’s current stance on staking facilities linked to Ethereum’s proof-of-stake (PoS) consensus model. Following The Merge in 2022, the agency opened investigations into the decentralized network and sued America’s largest crypto exchange, Coinbase, for allegedly offering unregistered securities through its Ethereum staking service.

The news of Fidelity’s filing arrived just hours before the commission’s deadline to issue a final decision on two bids from VanEck and ARK 21Shares this week. Grayscale Investments, whose CEO Michael Sonnenshein stepped down on May 20, also filed an updated 19b-4 for its Ethereum Mini Trust product. Van Buren Capital GP Scott Johnsson noted that Grayscale still aims to treat Ether as a commodity, aligning with the industry sentiment that champions the cryptocurrency as a non-security asset.

Variant Fund Chief Legal Officer Jake Chervinsky stated that a green light for the fund could lead to a clearer classification for Ether and settle a year-long debate.

ETF Approval Boosts Ethereum Market

After filings suggested that the SEC may approve spot ETH ETFs, Ethereum’s market cap reclaimed $450 billion, rising more than 22% in 24 hours, according to CoinMarketCap. CoinGlass data also showed a record high for Ether futures on centralized exchanges. The aggregate open interest (OI) in unsettled contracts surpassed $15 billion for the first time, with Binance holding the largest share of trading activity at $5.97 billion in OI.

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