California Attorney General Rob Bonta announced on October 16, 2026, that his office had reached a $500,000 settlement with Fidelity Digital Assets, National Association (the successor entity to Fidelity Digital Asset Services).
The agreement addresses allegations that the firm’s earlier limits on moving cryptocurrency off its platform for California retail customers violated the California Commodity Law of 1990.
Under that statute, certain speculative commodity contracts are restricted unless the buyer receives physical delivery within a set period; state authorities treat the ability to withdraw crypto as the functional equivalent of delivery.
From November 2022 until April 2025, California customers could purchase and sell cryptocurrencies on the Fidelity platform but could not send the assets directly to external wallets.
The company attributed the restriction to the lack of required approval from its then-prudential regulator, the New York Department of Financial Services (NYDFS).
Permission arrived in April 2025, after which the transfer capability was extended to all California retail customers by June 2025.
Fidelity has denied any wrongdoing and entered the settlement without admitting a violation of law.
The $500,000 payment covers the Attorney General’s investigative costs and resolves the released potential claims; the agreement does not create a fund for direct compensation to customers.
Looking ahead, the settlement confirms that California customers already possess the ability to move cryptocurrency to external wallets, subject to applicable laws, rules, and regulations.
Should Fidelity later decide to discontinue transfer functionality as a standard feature for ordinary retail accounts, it must give California customers reasonable written notice.
The firm retains authority to limit or block individual transfers when necessary to protect platform security or specific account holders.
A distinct provision addresses tax-advantaged accounts.
The agreement states that Fidelity intends to introduce Fidelity Crypto IRA products in California, aligning with offerings already available in other states, though it sets no launch timeline.
Critically, the settlement expressly excludes these accounts from any obligation to offer external-wallet transfers.
It notes that Fidelity does not currently provide—and is not required by the agreement to provide—transfer capability for tax-advantaged accounts governed by federal law, including those subject to Internal Revenue Code section 408 or rules governing nontaxable transfers and direct rollovers between retirement accounts.
Fidelity’s own materials reinforce the distinction.
The firm’s IRA FAQ indicates that Fidelity Crypto for IRAs remains unavailable in California and Oregon.
In states where the product is offered, crypto deposits and withdrawals to external wallets are not supported, and customers cannot take money or cryptocurrency directly out of the crypto IRA.
Instead, they move US dollars from the crypto IRA’s cash position into a linked Fidelity brokerage IRA and then use the brokerage account’s withdrawal tools.
Transfers between the linked brokerage IRA and the crypto IRA are treated as nontaxable and nonreportable.
The settlement therefore secures a prospective notice commitment for standard retail crypto accounts while leaving retirement-account treatment unchanged and outside the wallet-transfer terms. It follows a similar 2024 resolution involving Robinhood Crypto and reflects California’s ongoing scrutiny of whether platform restrictions on withdrawing digital assets comply with state commodity rules.
