Fidelity pays California $500,000 over crypto withdrawal limits

Fidelity Digital Assets has agreed to pay California $500,000 to end an investigation into how it once restricted crypto withdrawals. California Attorney General Rob Bonta announced the settlement on 16 October. Fidelity denies wrongdoing and did not admit to breaking any law, CryptoSlate reports.

What the investigation was about

According to the agreement, from November 2022 to April 2025 California retail customers of Fidelity Digital Asset Services could buy and sell crypto but could not send it straight to an outside wallet. Fidelity received regulatory approval for transfers in April 2025, and the feature reached all California customers by June 2025. The settling company, Fidelity Digital Assets, National Association, is the successor to that business.

The $500,000 goes to the attorney general for investigation fees and costs and to settle the released claims. The agreement does not set up a compensation fund for customers.

What Fidelity has promised

• Notice before any rollback: if Fidelity decides to stop offering retail crypto transfers, it must give California customers reasonable written notice first.
• Security exceptions remain: it can still restrict or block individual transfers to protect its platform or an account holder.
• Transfers live today: Fidelity's state availability page still lists crypto deposits and withdrawals for regular Fidelity Crypto accounts in California.

Being able to withdraw matters because it lets you choose who holds your keys — our guide on how to store crypto safely explains the trade-offs, and centralised vs decentralised exchanges covers custody on trading platforms.

The IRA gap

The deal says Fidelity plans to launch Crypto IRA accounts in California but gives no date, and Fidelity's FAQ still lists the product as unavailable in California and Oregon. Tax-advantaged accounts, including IRAs, are explicitly left out of the transfer commitment. Where Fidelity Crypto IRAs are offered, crypto cannot be withdrawn directly; customers move the dollar value into a linked Fidelity brokerage IRA instead. Big brokers are widening crypto access fast — Schwab recently opened trading to all eligible clients — so withdrawal rules are becoming a key point of comparison.