Fidelity plans to enable ether staking and quarterly cash distributions for the Fidelity Ethereum Fund (FETH). The firm filed an amended registration statement to make these changes, according to a report by CoinDesk.
The fund holds about $898 million in net assets. This update follows a November 2025 IRS bulletin that created a safe harbor for crypto trusts. It allows them to stake assets without losing their specific tax status.
Key facts
- Fidelity will retain 85% of gross staking rewards to cover expenses and fund distributions.
- Service providers, including node operators, will receive the remaining 15% of rewards.
- Blockdaemon, Figment, and Galaxy are listed as node operators for the trust.
- The fund may sell some ETH to raise cash if needed for quarterly payouts.
- Grayscale and 21Shares have pursued similar initiatives, while BlackRock launched a separate product.
Why it matters
This move allows investors in the FETH fund to earn yield from staking while maintaining the fund’s current tax structure. It aligns Fidelity with other major asset managers who are integrating staking rewards into their ether products following recent regulatory clarity from the IRS.