Key Takeaways:
- Fidelity has submitted an amended S-1 application to the SEC for a spot Ether ETF, specifying that the underlying Ether tokens will not be staked.
- The SEC has reversed its stance on spot Ether ETFs, prompting updates to 19b-4 filings; Bloomberg analyst Eric Balchunas now sees a 75% chance of approval.
- The SEC’s classification of staked Ether as a security remains a critical issue, with potential delays in S-1 filings approval.
Fidelity has submitted an amended S-1 application to the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF).
The updated filing specifies that the ETF’s underlying Ether tokens will not be staked.
⚠️ JUST IN:
— Investing.com (@Investingcom) May 21, 2024
*FIDELITY AMENDS SPOT ETHEREUM ETF S-1 FILING, STATES THE TRUST'S ETHER "WILL NOT BE STAKED"#ETH pic.twitter.com/pfWyNAs95M
This amendment comes after the SEC reportedly reversed its stance on spot Ether ETFs, possibly due to political pressure, and asked ETF issuers to update their 19b-4 filings.
The SEC’s next deadline is May 23 for VanEck’s Ether ETF proposal, with Bloomberg ETF analyst Eric Balchunas raising the approval odds to 75% from 25%, though this applies only to the 19b-4 form.
Bloomberg ETF analyst James Seyffart noted that S-1 filings must also be approved, stating it could take weeks to months before Ether ETFs are live.
🚨FIDELITY FILES UPDATED S-1 ETHEREUM ETF APPLICATION – "TRUST'S ETHER WILL NOT BE STAKED"🚨
— BSCN (@BSCNews) May 21, 2024
– Fidelity, one of the seven $ETH ETF hopefuls, has just now filed an updated S-1 application with the US Securities and Exchange Commission.
– The news comes less than a day after the… https://t.co/MM1Dr8nAFH pic.twitter.com/nvSQOiytVs
The SEC has previously indicated that staked Ether might be classified as a security.
SEC Chair Gary Gensler mentioned that cryptocurrencies allowing staking could be considered securities under the Howey test.
This stance is supported by Alex Thorn of Galaxy Research, who speculated that the SEC might distinguish between non-staked Ether and staked Ether, with the latter being classified as a security.
Fidelity Files Amended S-1 for Spot Ether ETF With SEC pic.twitter.com/WFk99Bp0uQ
— Benzinga (@Benzinga) May 21, 2024
Fidelity initially filed the S-1 application on March 27, intending to stake part of the fund’s Ether.
The initial application highlighted risks such as slashing penalties, liquidity issues, and taxable events without associated distributions.
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