Fidelity, a $4.9 trillion asset manager, has submitted an amended S-1 registration statement to the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF).

In the updated filing, Fidelity has removed plans to stake a portion of the fund’s assets, likely to improve the chances of SEC approval following a recent change in the regulator's stance.

In the new S-1 application submitted on Tuesday, Fidelity removed the clause indicating it would stake Ether through third-party providers. The revised statement explicitly states that the company will “not stake the ether” held by the custodian.

Staking involves locking Ethereum tokens on the network for a period to earn rewards, a crucial part of Ethereum’s proof-of-stake model since September 2022. Staking rewards are considered passive income by cryptocurrency traders.

The previous version of Fidelity’s filing mentioned that staking rewards would be treated as taxable income, creating taxable events for investors without corresponding distributions from the trust.

The removal of staking is likely due to SEC concerns about staking crypto assets. In June 2023, the SEC sued Coinbase for offering staking services, alleging it violated federal securities laws.

Optimism is high as the spot ETH ETF deadline approaches. The amended filing comes amid reports that the SEC has softened its stance on spot Ethereum ETFs, likely due to political pressure, and has asked ETF issuers to update their filings. By dropping staking plans, Fidelity may be reducing regulatory risks, increasing the chances of ETF approval. Bloomberg analysts recently raised the probability of approval from 25% to 75%.

The SEC has delayed decisions on several spot Ether ETF proposals, including those from Invesco Galaxy, Grayscale, Fidelity, Franklin Templeton, VanEck, and BlackRock. The SEC must decide on VanEck’s application by May 23 and on Ark and 21Shares’s application by May 24.

Fidelity's updated filing follows a significant price increase for Ether, which rose over 22% in the past 24 hours to a two-month high of $3,818, according to CoinGecko data.

Expectations are high as the SEC’s decision deadline nears. Approval and listing of spot Ethereum ETFs could significantly boost Ether's price, potentially pushing it to new all-time highs. Conversely, an SEC rejection could lead to a substantial price correction.