$500,000 Settlement: Fidelity Digital Assets Resolves California Investigation into Crypto Withdrawal Restrictions

Odaily Report: California Attorney General Rob Bonta announced on October 16 that his office has reached a $500,000 settlement agreement with Fidelity Digital Assets, National Association (the successor entity to Fidelity Digital Asset Services), regarding the company's previous practice of restricting California retail customers from transferring cryptocurrencies to external wallets. Regulators believe the practice may have violated the California Commodities Act of 1990, which restricts certain speculative commodity contracts unless the buyer receives physical delivery within a specified period; the California government views the ability to withdraw cryptocurrencies as a functional equivalent of delivery.

From November 2022 to April 2025, California customers could buy and sell cryptocurrencies on the Fidelity platform but could not send assets directly to external wallets. Fidelity stated that the restriction stemmed from the New York State Department of Financial Services (NYDFS) not approving the relevant functionality at the time; approval was granted in April 2025, and the transfer feature was extended to all California retail customers in June 2025.