Fidelity pays $500,000 in California crypto transfer settlement
Fidelity settles California crypto withdrawal case for $500,000
Fidelity Digital Assets will pay California $500,000 to settle allegations about past restrictions on crypto withdrawals at Fidelity Digital Asset Services, California Attorney General Rob Bonta announced on Oct. 16.
The settling entity is Fidelity Digital Assets, National Association, the successor to the business named in the case. Fidelity denies any wrongdoing and signed the agreement without admitting that it broke the law.
The money is described as recognition of investigation-related fees and costs and as payment to settle potential claims that were released under the deal. The agreement sets up no fund to compensate customers.
What the California agreement requires
- Fidelity must give California customers reasonable written notice if it stops offering ordinary retail crypto transfers as a feature.
- Fidelity can still block or limit transfers when it says this is needed to protect its platform or individual account holders.
- The agreement notes that customers can currently move crypto to external wallets, where the law allows.
The withdrawal limits that led to the deal
According to the agreement, from November 2022 through April 2025 California retail customers could buy and sell crypto on the platform but could not send it directly off it. A crypto wallet is a tool for holding and sending digital assets, and a transfer to an external wallet moves the asset out of the platform's control.
Regulatory permission to allow transfers came in April 2025. The transfer feature was available to all California customers by June 2025.
Crypto IRAs sit outside the transfer terms
The agreement says Fidelity plans to launch Fidelity Crypto IRA accounts in California but gives no launch date. An IRA is a retirement account that receives US tax advantages.
The deal expressly leaves covered tax-advantaged accounts out of its transfer obligation. That includes IRAs and accounts covered by federal rules for nontaxable transfers between retirement accounts.
Fidelity's current IRA FAQ says the product is still not available in California and Oregon. Where crypto IRAs are offered, the FAQ says transfers are not available and customers cannot withdraw money or crypto directly from the account. Instead, they can move funds from its US dollar position to a linked Fidelity brokerage IRA and use that account's withdrawal features.
Availability in California today
Fidelity's state-availability page, checked by CryptoSlate on Oct. 18, still lists crypto deposits and withdrawals for ordinary Fidelity Crypto accounts in California.
What is confirmed
The settlement amount, the announcement date of Oct. 16, the notice commitment, the exclusion of IRAs, and the timeline of the transfer feature are all set out in the agreement or the attorney general's announcement. Fidelity's denial of wrongdoing is also confirmed by the deal, which was signed without an admission of liability.
What is still unclear
The agreement does not state when Fidelity Crypto IRA accounts will launch in California. It also gives no customer compensation fund, and it does not resolve how transfer rules will apply to tax-advantaged accounts in the future.
Why this matters
The deal sets a rule for the future: if Fidelity ends retail crypto transfers in California, customers must be told in writing. It also shows that retirement accounts such as IRAs follow separate access rules, so crypto held in those accounts may not be freely moveable even where ordinary accounts allow wallet transfers.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.