Fidelity Updates Spot Ethereum ETF S1 Filing with ETH Staking Removed
Fidelity, one of the world’s leading asset management firms, has submitted an updated S-1 application to the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF) ahead of upcoming deadlines, which could be made as soon as May 23.
The Eethness Stakes is pretty good. Nice look at all the entrants dealing w this fire drill. Hearing the SEC wants revised 19b-4s returned to them by 10am tmrw morning (based on a bunch of comments they just received today) for likely approval as soon as Wed. https://t.co/rmkSfnX45W
— Eric Balchunas (@EricBalchunas) May 20, 2024
A quick note, @EricBalchunas and increased odds to 75% for spot #Ethereum ETF approvals. But that's for the 19b-4 May 23rd deadline (@vaneck_us's deadline) We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live Eth ETF h/t @NateGeraci
— James Seyffart (@JSeyff) May 20, 2024
The S-1 filing is an important and required document by the SEC to launch publicly traded securities in the United States. The document gives a thorough overview of the security and the company providing it, ensuring transparency and compliance with federal regulations.
According to reports, the SEC has requested that ETF issuers amend their 19b-4 filings. The Wall Street Journal, which cited people familiar with the matter, said the asset managers were instructed by the SEC's Trading and Markets Division on Monday to make changes to their filings and submit them. Exchanges are being asked to update their 19b-4 filings on an "accelerated basis," according to a report by CoinDesk.
Fidelity's revised S-1 application makes it clear that the underlying Ether tokens for the suggested ETF won't be staked. In the updated application, all mention of staking, including staking rewards, was removed. Given rumors that the SEC might allow spot Ethereum ETFs by separating the security status of pure ETH from staked ETH, this is a significant change. This decision aims to address security and regulatory concerns. Staking raises questions about regulatory frameworks and asset custody, even though it can increase yields and network security. To help alleviate these worries and better align its ETF with legal requirements, the firm plans to eliminate staking.
Eric Balchunas, a senior analyst for Bloomberg ETFs, has raised the likelihood of approval. He has increased it from 25% to 75% for the 19b-4 filings. This is in response to the request that prospective Ethereum ETF issuers submit updated 19b-4 forms by 10 a.m. this morning, as seen via his post on X (formerly known as Twitter). These funds can start trading if the 19b-4 forms are accepted and the S-1 registration statements become effective.
Eric stated that the final day for the SEC to accept or reject VanEck's and ARK’s proposed spot Ethereum ETF's 19b-4 forms is on Wednesday, May 23, and Thursday, May 24, respectively.
This accelerated action seems to validate rumors that the SEC might be getting ready to approve the aforementioned ETFs soon or shortly after.
Disclaimer: This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.