Fidelity Ethereum Fund announces new custodial agreements and staking program
Fidelity Ethereum Fund announces new custodial agreements and staking program
Fidelity Ethereum Fund (Cboe BZX:FETH) disclosed Monday that it entered into new custodial agreements and amended its trust documents to support the launch of a staking program for its ether holdings. The information was provided in a statement filed with the Securities and Exchange Commission.
According to the filing, on August 7, the fund signed custodial services agreements with Anchorage Digital Bank NA and BitGo Bank & Trust, N.A. Under these agreements, the custodians will provide custody and safekeeping services for the fund’s ether. The fund’s sponsor, FD Funds Management LLC, will also use these custodians to facilitate the staking of the fund’s ether through trusted node operators.
The fund’s existing custodial arrangements with Fidelity Digital Assets, N.A. remain unchanged.
On the same day, the fund amended its sponsor agreement with FD Funds Management LLC to include provisions for ether staking. Under the amended agreement, the fund will pay the sponsor 15% of any staking rewards it receives. This amount may be shared among the sponsor, custodians, node operators, or other third parties involved in staking activities.
Additionally, the sponsor and the fund’s trustee, CSC Delaware Trust Company, entered into a third amended and restated trust agreement to allow for ether staking.
The sponsor expects to begin staking activities as soon as the fund’s registration statement becomes effective. Through the staking program, node operators will establish validator nodes and delegate the fund’s ether, which will entitle the fund to receive staking rewards. The custodians will retain exclusive control of the private keys for any staked ether.
The fund will retain 85% of staking rewards, with the remainder distributed as fees among the sponsor, custodians, and node operators. The fund also plans to make quarterly cash distributions of net staking income to shareholders, which may involve selling staking rewards or a portion of its ether holdings.
This article is based on a statement filed with the Securities and Exchange Commission.