Fidelity Settles Crypto Transfer Case in California for $500K

Fidelity Reaches Settlement with California Regulators

Financial services firm Fidelity will pay $500,000 to the California Department of Financial Protection and Innovation (DFPI) to settle allegations that it improperly limited customer access to their digital assets. The agreement, announced today, centers on Fidelity’s handling of customer requests to transfer cryptocurrency holdings from its platform.

Terms of the Agreement

Under the terms of the settlement, Fidelity is required to provide notice to customers if it decides to discontinue its retail cryptocurrency transfer feature. The agreement preserves existing security restrictions and, crucially, explicitly excludes Individual Retirement Accounts (IRAs) from the terms regarding wallet transfers. This means IRA holders may still face limitations on moving their crypto off the Fidelity platform.

Background of the Dispute

The DFPI’s investigation reportedly focused on instances where Fidelity allegedly delayed or denied customer requests to withdraw their cryptocurrency. The regulator argued that these restrictions violated California law. Fidelity did not admit wrongdoing as part of the settlement. The firm has been expanding its digital asset offerings, including a spot Bitcoin ETF, and this settlement addresses concerns about customer access to those holdings.

Source: CryptoSlate