Fidelity Updates Ethereum ETF Proposal to Include Staking

Here are some of the major developments in the world of crypto over the past few days.
 some of the major developments from the world of crypto
some of the major developments from the world of crypto

LDO prices after an updated Fidelity Ether Spot ETF application suggested staking “a portion” of the fund’s ETH to generate additional income. Financial services giant Fidelity is seeking permission to pledge a portion of the $3,349 worth of Ether (ETH) held by its planned Ether Spot exchange-traded fund (ETF) to provide investors with additional income. In a 19b-4 amendment filed with the U.S. Securities and Exchange Commission on March 18, Fidelity stated that, if the ETF is approved, the fund would invest an undisclosed amount of its assets through one or more investment providers.

However, Lido DAO has fallen by 27% in the last week, reflecting a broader decline in Ether. Fidelity is one of eight fund issuers that have submitted an ETF application and are currently awaiting SEC approval. On February 8, Ark 21Shares also announced plans to invest a portion of the ETH from its planned fund. A few days later, Franklin Templeton participated in the Ether ETF spot competition and expressed an intention to invest part of the ETF to generate additional income. The company entered the race on November 18 last year, joining others including the world's largest investment firm BlackRock, Cathie Wood's ARK Invest and crypto asset manager Grayscale.

If the SEC does not approve the eight ETFs by Van Eck's final May 23 deadline, the entire list of potential issuers will have to resubmit their applications later. Eric Balchunas, an ETF analyst at Bloomberg, said the chance of a spot ETF being approved before Van Eck's May deadline is just 35%. In January, Blachunas set the approval probability at 70%, but according to Cointelegraph the SEC's "radio silence" on potential fund issuers and political opposition to Chairman Gary Gensler were bad signs for the approval process.

Cryptocurrency-focused lawmaker wants to lead the U.S. House of Representatives Financial Services Committee in 2025

French Hill has chaired the Subcommittee on Digital Assets, Financial Technology, and Integration since January 2023. Arkansas Rep. French Hill, chairman of the U.S. House Financial Services Subcommittee on Digital Assets, Financial Technology, and Integration, plans to take over the leadership of the entire committee following the departure of Patrick McHenry. According to a March 17 report from Punchbowl News stated that Hill is one of the candidates to chair the full Financial Services Committee starting in January 2025, when McHenry's term ends. McHenry announced in December 2023 that he did not plan to run for re-election after 20 years in office.

Hill has served as Chair of the Subcommittee on Digital Assets since its inception in January 2023 and serves as Vice Chair of the full House Committee.Under his and McHenry's leadership, the committee has held hearings on cryptocurrency-related issues, including terrorist financing and money laundering. Since Speaker McHenry announced he would not run for re-election, Rep. Hill has met with colleagues about the search for the House Financial Services Chair. With four decades of experience in public and private sector financial services, Rep. Hill has decided to seek the committee chairmanship.

The leadership of the House committee will depend on the Republican majority after the 2024 US elections. Control of the House, Senate and presidency is at stake between Democratic and Republican lawmakers. In a January 2024 interview, Hill said he expected certain cryptocurrency legislation to be approved by the full committee by the end of the year.

Binance Surpasses $100 Billion in User Assets Under Custody

“In the past few weeks, there has been no shortage of records, all-time-highs, and crypto industry firsts,” Binance wrote. It appears that crypto exchange Binance has emerged to be largely unaffected by a series of United States Department of Justice actions against the exchange and its co-founder Changpeng Zhao, with its assets under custody surpassing $100 billion as of March 18. As per the announcement, Binance users’ assets under custody have more than doubled from $40 billion at the beginning of the year. “We hold all user funds at a 1:1 ratio, plus additional reserves, which anyone can verify using Binance’s proof-of-reserves (POR) system,” Binance said.

Binance proof of Reserve currently shows collateralization rates of over 100% for all major cryptocurrencies and altcoins. However, experts have pointed out that reserve income only contains half of the relevant reserve information and does not include a company's liabilities in calculating its net worth. Meanwhile, Binance CEO Richard Teng stated that the exchange's capital structure is debt-free. The exchange said: “Please note that blockchain research firm ’s aggregate numbers, while useful, are not a perfect representation of the amount of user funds on Binance; some of the assets included in these calculations are Binance's own operating assets." The source of the most accurate information about users' asset holdings on Binance is our monthly POR checks.

On March 12, Binance announced that it would cut ties with its venture capital arm, Binance Labs, despite the latter averaging returns of over 14x on invested projects and its portfolio now being worth $10 billion. “Binance Labs is licensed by Binance to use its trademark but otherwise has no other relationship with the Binance cryptocurrency exchange or any affiliated business or entity,” it stated.

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