Fidelity plans staking for FETH spot Ethereum ETF, quarterly cash payouts

Fidelity plans to introduce staking to its $898 million spot Ethereum ETF, FETH, and distribute the resulting income to investors as quarterly cash payments, CoinDesk reported. According to a filing with the SEC, FETH may stake up to 100% of its ETH holdings under normal market conditions. No minimum staking ratio has been set, and some ETH will remain unstaked to meet liquidity needs including redemptions and operating expenses. The move became possible after the U.S. Internal Revenue Service issued safe harbor guidance in November last year. Under that guidance, crypto trusts meeting certain requirements can stake held assets while maintaining their existing tax status. FETH will receive 85% of gross staking rewards, while the remaining 15% will go to the fund sponsor, custodian, and node operators. Blockdaemon, Figment, and Galaxy were designated as node operators.