Chicago Board Options Exchange submitted its SEC application to let Fidelity Ethereum ETF investors stake their funds for profit. The new amendment would help investors get more investment options by generating staking returns.
Following a year since its release the Fidelity Ethereum ETF can add staking support as stated in the proposal submitted to SEC by CBOE BZX Exchange. This proposal attempts to take away a ban that restricts staking activities in the fund.
In its document to regulatory authorities CBOE BZX seeks permission to let its sponsor stake either selected or every Ethereum (ETH) fund asset with respected providers. Ethereum now supports Proof-of-Stake (PoS) activities including staking which began last year.
“As per the plan the Sponsor could place or arrange for placement of the Trust’s complete or partial ether stake through several approved staking providers,” the document explains.
SEC Reviews ETH Staking Proposal for Fidelity ETF
The plan suggests that staking ETH would help the investment fund track its performance better and follow necessary rules. The document presents an 18-page plan to operate staking activities in a way that matches all present regulations. The ETF sponsor takes measures to maintain adequate funds for withdrawals and stays within SEC security rules through their strategy.
The fund takes steps to keep separate its assets and make all its financial activities easy to understand. During the filing period the custodian maintains access to private keys linked with the staking withdrawal address. The control system aims to protect investor assets during staking operations.
The SEC gets 45 days to review and react to the submitted documents. Many business professionals now expect crypto financial products to receive friendlier government oversight. SEC officials now approach crypto-regulation differently which shows in their decision to drop the Kraken case and their updates on security definitions.
The market reaction to news about Ethereum remained minimal since its price fluctuated close to $2,000 without significant changes. Some investors are positive about Ethereum staking as an opportunity but market experts predict an upcoming price decrease to $1,000 levels.
When the SEC allows Fidelity to create its Ethereum ETF it will become part of an increasing number of investment products that offer staking benefits. The approval of this Ethereum ETF would establish a common standard that allows more digital currency investments to reach financial markets.
