Fidelity Investments has recently updated its S-1 filing with the SEC with a new Spot Ethereum ETF. This comes amid much hype concerning the approval process for such ETFs, which is supposed to take place on May 23. The new application explains that the Ether tokens that support this ETF will not be staked. This decision was made to ease regulators’ concerns about the security and effect staking activities will have.
This amendment is particularly relevant to the S-1 filing, which is a registration form that is required by the SEC for companies that are seeking to issue publicly traded securities in the United States. This procedure ensures that all the rules and regulations set by the federal government are observed and helps maintain transparency in the market. New rumors indicate that there could be a shift in the stance of the SEC for Spot Ethereum ETFs, given foreign policies, including political influence. Hence, issuers have been required to modify their 19b-4 submissions, which contain elaborate information about the functioning and processes of the proposed ETFs.
The attention now focuses on May 23, the crucial date for the SEC’s decision on VanEck’s proposal on the Spot Ethereum ETF. There has been a drastic change in the overall attitude toward the possibility of approving these ETFs. As Eric Balchunas, a senior analyst at Bloomberg focused on ETFs, mentioned, the tendencies increased the chances of approval of such 19b-4 forms from 25% to 75%. This shift in expectation is based on increasing confidence within the financial community that the U.S. SEC is gearing toward approving Spot Ethereum ETFs.
The recent withdrawal of the staking feature by Fidelity from its proposed ETF could greatly impact the final determination by the SEC. Balchunas suggested through social media platform X that the SEC has no intention of allowing staking through Ethereum ETFs and has been emphatic about this.
Moreover, the actions that have recently occurred in the SEC show that the SEC may be trying to draw a certain differentiation between Ethereum (ETH) and staked Ethereum (StETH), or the “staking as a service ETH”. This strategy may well coincide with their ongoing legal cases and hearings and thereby could allow Ethereum ETFs to be green-lit while remaining within the confines of previous positions held by the agency.
This theory has been further supported by Alex Thorn, a researcher at Galaxy Investment Partners. In Thorn’s opinion, if the Securities and Exchange Commission (SEC) were to recognize staked ETH as a separate asset class, it would be able to properly navigate the convoluted rules surrounding Ethereum ETFs without violating its prior decisions. This would help to provide a solution to the various controversies surrounding the regulations that have made it difficult for Ethereum ETFs to be approved, thus creating chances for them to be brought into the American market.
As for this proposed regulation, other applicants regarding ETFs have also made similar adjustments. For instance, Ark 21Shares recently removed a staking provision from the Ether ETF S-1 application, which could mean that all applicants for the ETFs are collectively changing direction in response to the new regulations. Since these strategic changes by ETF candidates, one can see a positive sign for integrating Ethereum-based solutions into traditional financial markets.
