TLDR
- Fidelity Digital Assets will pay California’s attorney general $500,000 to resolve allegations concerning historical cryptocurrency withdrawal restrictions.
- The settlement requires Fidelity to provide advance written notification to California users before discontinuing retail cryptocurrency transfer capabilities.
- The transfer notification requirement does not apply to cryptocurrency IRA products, which remain unavailable in California and Oregon.
- Fidelity has not admitted liability or wrongdoing as part of the settlement agreement.
- California-based users regained the ability to transfer digital assets to external wallets beginning in June 2025.
Fidelity Digital Assets has reached a settlement agreement with California authorities to resolve an investigation into historical cryptocurrency withdrawal limitations. The company will pay $500,000 and commit to advance customer notification before ending transfer services.
California Attorney General Rob Bonta announced the settlement on Oct. 16. The investigation focused on withdrawal restriction practices at Fidelity Digital Asset Services.
Fidelity Digital Assets, National Association, the successor entity to the investigated company, entered into the agreement. The settlement contains no admission of liability or acknowledgment of legal violations by Fidelity.
Key Settlement Terms
The $500,000 payment will be directed to California’s attorney general’s office. These funds will cover investigation-related expenses and costs incurred during the inquiry.
The agreement does not establish a customer restitution program.
According to the settlement terms, California retail customers faced transfer limitations from November 2022 through April 2025. During this window, users could execute buy and sell transactions but lacked the ability to withdraw cryptocurrency to external addresses.
Regulatory approval was granted to Fidelity in April 2025. By June 2025, the company had extended transfer functionality to all California-based retail customers.
The settlement acknowledges current customer access to external wallet transfers, within the bounds of existing regulations. Should Fidelity choose to discontinue this capability for retail users, California customers must receive adequate advance written notification.
Fidelity retains authority to limit or prevent specific transfers. These restrictions may be implemented when necessary to safeguard platform security or protect individual account integrity.
IRA Products Outside Settlement Scope
Retirement accounts with tax advantages fall outside the transfer notification provisions. This exemption applies to individual retirement accounts and similar tax-deferred vehicles.
The settlement also excludes accounts governed by federal regulations regarding tax-exempt rollovers between qualified retirement plans.
According to the agreement, Fidelity intends to introduce Fidelity Crypto IRA services to California residents. No specific timeline for this rollout has been disclosed.
Fidelity’s current IRA documentation indicates the cryptocurrency retirement product remains unavailable to California and Oregon residents.
In jurisdictions where Fidelity Crypto IRA is accessible, account holders cannot execute cryptocurrency transfers. Direct withdrawals of either fiat currency or digital assets from these accounts are prohibited.
Accountholders may transfer U.S. dollar balances from the crypto IRA to a connected Fidelity brokerage IRA. Once transferred, users can access standard withdrawal mechanisms available through the brokerage account.
As of October 18, Fidelity’s state availability documentation continues to show cryptocurrency deposit and withdrawal capabilities for standard Fidelity Crypto accounts serving California customers.
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