United

James

Fidelity has filed an amended S-1 application with the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF).
The asset management giant has reportedly filed an updated S-1 application, stating that the ETF’s underlying Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) tokens will not be staked. S-1 filings are the SEC’s required registration form for launching publicly traded securities products in the United States.
 The amended filing follows reports that the United States SEC <a href="https://cointelegraph.com/news/sec-reconsidering-spot-ether-etf-denial-analysts">has U-turned on spot Ether ETFs</a> — possibly due <a href="https://cointelegraph.com/news/united-states-joe-biden-sab-121-accounting-crypto-law">to political pressure</a> — with reports stating it has asked ETF issuers to update their 19b-4 filings.
The next SEC deadline is May 23 for VanEck’s Ether ETF proposal. While senior Bloomberg ETF analyst Eric Balchunas has increased the odds of approval to 75% from 25%, this only applies to the 19b-4 form.
However, Ether ETF issuers will also need to get their S-1 filings approved, according to Bloomberg ETF analyst James Seyffart, who wrote in a May 20 X <a href="https://x.com/JSeyff/status/1792650597377757456" target="_blank" rel="noopener nofollow">post</a>:
<blockquote data-ct-non-breakable="true">
 “We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live ETH ETF… That said, if we’re correct and we see these theoretical approvals later this week. It *should* mean that S-1 approvals are a matter of ‘When’ not ‘If’...”
</blockquote>
Related: <a href="https://cointelegraph.com/news/grayscale-ceo-michael-sonnenshein-steps-down">Grayscale CEO Michael Sonnenshein steps down</a>
<h2 data-ct-non-breakable="true" id="staked-ether-could-be-classified-as-a-security-despite-eth-etf-approval">Staked Ether could be classified as a security despite ETH ETF approval</h2>
The SEC has previously sought to classify Ether as a security, and Ethereum’s upgrade to <a href="https://cointelegraph.com/blockchain-for-beginners/proof-of-stake-vs-proof-of-work:-differences-explained">proof-of-stake (PoS</a>)&nbsp;may have given the regulator another reason.
During a 2022 <a href="https://cointelegraph.com/news/sec-chair-gensler-holds-tight-to-his-crypto-position-in-preview-of-senate-testimony">Senate Banking Committee</a>&nbsp;hearing, SEC Chair Gary Gensler reportedly said that cryptocurrencies and intermediaries that allow holders to “stake” their crypto may define them as a security under the Howey test, according to The Wall Street Journal. 
Despite the U-turn on Ether ETFs, the securities watchdog <a href="https://cointelegraph.com/news/staked-eth-sec-security-classification-analysis">may still classify staked Ether as a security</a>, according to Alex Thorn, the head of research at Galaxy Research. Thorn wrote:
<blockquote data-ct-non-breakable="true">
 “If the speculation about a 180 from SEC on the Ethereum ETFs is true, I would guess they try to thread a needle between “ETH” NOT being a security and “staked ETH” (or even more flimsily, “staking as a service ETH”) as BEING a security.”
</blockquote>
<a href="https://cointelegraph.com/news/fidelity-files-s-1-application-us-sec-spot-eth-eft-staking">Fidelity first filed the S-1 application</a> with the SEC on March 27. The initial filing stated that Fidelity aims to stake a portion of the fund’s ETH supply. 
The initial application noted that staking introduces additional risks, such as the potential loss of funds through “slashing penalties” and liquidity risks as the stake is processed.
Staking rewards would also be treated as income for the fund for tax purposes, as a result of which investors will experience a taxable event “without an associated distribution from the Trust.”
Magazine: <a href="https://cointelegraph.com/magazine/trader-turns-3k-into-46m-pepe-ethereum-gas-overhaul-tornado-cash-dev-guilty-hodlers-digest-may-12-18/">Trader turns $3K into $46M in PEPE, Ethereum gas overhaul, Tornado dev guilty: Hodler’s Digest, May 12-18</a>

Fidelity reportedly amends Ether ETF S-1 filing, removes ETH staking

Table of Contents

Cointelegraph

Other articles published on May 21, 2024

Here’s When Bitcoin Will Ignite New Parabolic Phase, According to Analyst Who Nailed Recent BTC C...

Spot Ethereum ETF Approval 'Not Even Remotely Priced In,' Warns Trader Who Sees 'Ethereum Overper...

Ethereum ETF approval odds jump from 25% to 75% – What changed?

American Bankers Association Urges House Leaders to Block Fed’s CBDCPlans

Hex Trust launches USDX stablecoin on Flare, offering real-world yields through clearpool partner...

Top 5 Meme Coins to Invest In for the 2024 Bull Market – $DOGEVERSE, $SEAL, $FLOKI, $WAI, $GME

Join our free newsletter for daily crypto updates!