Fidelity Adds Ether Staking to FETH, Plans Quarterly Cash Payouts

Fidelity files to add staking to its Ethereum Fund

Fidelity has filed an amended registration statement with the U.S. Securities and Exchange Commission (SEC) to add staking to its Fidelity Ethereum Fund. The Form S-3/A filing, made under file number 333-297005, would let the fund stake the ether it holds and earn rewards for shareholders. The amendment updates an earlier registration, filed in June 2026, that did not permit staking. According to CoinDesk, an Internal Revenue Service (IRS) safe harbor issued in November 2025 lets qualifying crypto trusts stake without losing their grantor-trust tax status.

The trust may stake up to 100% of its ether

Under normal conditions, the fund could stake as much as 100% of its ether, according to the filing. Fidelity set no minimum amount and would keep some ether available for redemptions, expenses, and liquidity needs. Node operators would run validator nodes on the Ethereum network, while custodians keep control of the private keys. The filing warns that staked ether can face "slashing" penalties and stays locked during the activation and exit periods. The sponsor says it would manage that liquidity risk before deciding how much to stake.

Fidelity retains 85% of staking rewards

The trust would keep 85% of the staking rewards it earns. The remaining 15% would go to service providers, including the sponsor, custodians, and node operators. Net rewards would first cover the fund's expenses before any money reaches investors. The filing states that these rewards are expected to count as income to shareholders for federal tax purposes.

The fund plans quarterly cash payouts to shareholders

Fidelity plans to make quarterly cash distributions of net staking income to shareholders. The fund would convert ether rewards into U.S. dollars, and it may sell part of its ether holdings to raise the cash. The filing states that these distributions are not guaranteed and could be changed or suspended. According to CoinDesk, IRS rules require the fund to distribute net staking rewards at least quarterly to keep its tax status.

New custodians will support the staking program

On 7 August 2026, the fund signed custodial services agreements with Anchorage Digital Bank and BitGo Bank & Trust to hold and safeguard its ether. Anchorage is regulated by the Office of the Comptroller of the Currency, and BitGo is a national banking association. FD Funds Management, the fund's sponsor, would use these custodians to arrange staking through trusted node operators. Fidelity expects to begin staking once the registration statement becomes effective, which had not happened as of the filing. According to CoinDesk, the fund held about $898 million in net assets.

Ether traded near $1,905 at time of publication

Ether traded at $1,905.34 at the time of publication, up 1.46% over the past 24 hours (CoinPaprika, 12 August 2026). The token's market value stood at about $229 billion. The fund tracks an ether index, and it expects staking rewards to help it outperform that index before expenses. The plan follows similar moves by other ether fund issuers seeking to offer yield on their products.

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