Leading stock exchange CBOE has filed to include staking in Fidelity’s Ethereum ETF, the Fidelity Ethereum Fund.

The Chicago Board Options Exchange (CBOE) has submitted a 19b-4 filing to the U.S. Securities and Exchange Commission (SEC) seeking approval to incorporate staking into the Fidelity Ethereum Fund (FETH).

This move seeks to bolster the fund’s returns for market participants by participating in Ethereum’s proof-of-stake consensus mechanism.

Details of the CBOE Filing

In its proposal, the CBOE outlines plans for the Fidelity Ethereum ETF to engage in staking activities. By staking Ether (ETH), the fund would actively participate in validating transactions on the Ethereum network, thereby earning additional ETH as rewards. 

This approach intends to boost the ETF’s overall yield, presenting investors with potential returns beyond mere price appreciation. The filing stressed that all staking activities would comply with existing regulatory frameworks, ensuring transparency and security for investors.

Background of the Fidelity Ethereum ETF

Notably, Fidelity Investments filed for its spot Ethereum ETF in November 2023, aiming to provide investors with direct exposure to ETH without the complexities of direct ownership. 

The SEC approved this ETF in May 2024, alongside similar products from other asset managers. Since its launch in July 2024, the Fidelity Ethereum ETF has attracted investor interest amid a growing demand for regulated crypto investment vehicles, raking in $1.45 billion in cumulative net inflows at press time.

However, the fund has faced challenges due to the SEC’s initial prohibition on staking within ETFs, limiting its potential returns.

SEC’s Stance on Staking in Ethereum ETFs

Historically, the SEC has been cautious regarding staking within ETFs. In May 2024, while approving several Ethereum ETFs, the SEC mandated that these funds refrain from participating in staking activities, citing concerns over securities laws violations. This restriction led to potential annual yield losses of approximately 3% for these funds. 

The landscape began to shift in early 2025. In February, the SEC acknowledged a filing from NYSE Arca proposing amendments to allow staking for the Grayscale Ethereum ETFs. 

The acknowledgment marked a potential softening of the SEC’s earlier position on staking within ETFs amid the change in leadership. Also, the CBOE’s latest filing comes nearly a month after it made a similar filing for the 21Shares Core Ethereum ETF.