Fidelity's Ethereum ETF has signed new custodial agreements and amended its trust documents to launch a staking program for its ether holdings. The fund disclosed the changes in a statement filed with the Securities and Exchange Commission, with the sponsor expecting staking to begin once its registration statement takes effect.
Fidelity's Ethereum ETF, the Fidelity Ethereum Fund (Cboe BZX: FETH), disclosed Monday that on August 7 it signed custodial services agreements with Anchorage Digital Bank NA and BitGo Bank & Trust, N.A., according to a statement filed with the Securities and Exchange Commission. The two custodians will hold the fund's ether and work with sponsor FD Funds Management LLC to facilitate staking through trusted node operators, while Fidelity Digital Assets, N.A. keeps its existing custodial role unchanged.
Staking rewards split between fund and sponsor
On the same day, the fund amended its sponsor agreement with FD Funds Management LLC to add staking provisions. Under the new terms, the fund will pay the sponsor 15% of any staking rewards it earns, an amount that may be shared further among the sponsor, the custodians, and node operators. The fund itself will keep 85% of the rewards, with the remainder covering those fees.
The sponsor and trustee CSC Delaware Trust Company also signed a third amended and restated trust agreement to permit ether staking.
Custodians keep control of the private keys
Once staking starts, node operators will set up validator nodes and delegate the fund's ether to them. The custodians will retain exclusive control of the private keys for any staked ether. The sponsor expects staking to begin as soon as the fund's registration statement becomes effective.
Fidelity also plans quarterly cash distributions of net staking income to shareholders, a process that may involve selling staking rewards or a portion of the fund's ether holdings.
Source: Investing.com
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