Fidelity, a leading asset manager with over $4.9 trillion in assets under management, has filed an amended S-1 registration statement with the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF).

In the updated filing submitted on Tuesday, Fidelity made a significant adjustment by removing plans for staking Ether from its proposal. The removal of the staking clause is seen as a strategic move to increase the likelihood of approval, particularly in light of recent indications of a softened stance from the SEC.

Staking, a process where users lock Ethereum tokens on the network to earn rewards, has become integral to Ethereum's consensus model since its transition to a proof-of-stake security system in September 2022. However, Fidelity's decision to exclude staking from its ETF proposal suggests concerns raised by the SEC regarding the regulatory implications of staking crypto assets.

The previous version of Fidelity's filing had outlined plans to stake a portion of the fund's assets through third-party infrastructure providers, with staking rewards treated as taxable income. This approach raised concerns about taxable events for investors without corresponding distributions from the trust.

The SEC's lawsuit against Coinbase in June 2023 for offering staking services via its platform highlighted regulatory uncertainties surrounding staking activities, potentially influencing Fidelity's decision to remove staking from its ETF proposal.

Despite these regulatory challenges, optimism surrounding the approval of spot Ethereum ETFs has grown in recent weeks, with reports suggesting a softened stance from the SEC, possibly due to political pressure.

As the deadline for spot ETH ETF approvals approaches, Fidelity's adjusted filing reflects the evolving regulatory landscape surrounding crypto ETFs. Investors and industry observers are eagerly awaiting further developments as the SEC considers Fidelity's revised proposal.