Fidelity's $500,000 California crypto settlement excludes IRAs from transfer obligations

Fidelity Digital Assets' $500,000 settlement with California adds a written-notice commitment if Fidelity stops offering ordinary retail crypto transfers. The agreement excludes covered tax-advantaged accounts, including individual retirement accounts, from transfer obligations. Attorney General Rob Bonta announced the deal on Oct. 16 over allegations about past withdrawal restrictions at Fidelity Digital Asset Services. The settling entity, Fidelity Digital Assets, National Association, is the successor to Fidelity Digital Asset Services. Fidelity denies wrongdoing and entered the agreement without admitting a violation of law.

Fidelity agreed to pay the attorney general $500,000 for investigation-related fees and costs and to settle the released potential claims. The agreement specifies no customer compensation fund.

The agreement describes restrictions from November 2022 through April 2025, when California retail customers could buy and sell crypto but could not transfer crypto directly off the platform. Regulatory permission came in April 2025. The transfer feature reached all California customers by June 2025. The settlement recognizes the existing ability to transfer crypto to external wallets, subject to applicable law. Fidelity must give California customers reasonable written notice if Fidelity decides to stop offering transfers as a feature for retail customers. Fidelity can still restrict or disallow transfers to protect the platform or individual account holders. Fidelity's state-availability page, checked Oct. 18, continues to list crypto deposits and withdrawals for ordinary Fidelity Crypto accounts in California.

The agreement says Fidelity plans to launch Fidelity Crypto IRA accounts in California without specifying a launch date. The agreement expressly excludes IRAs and accounts subject to federal requirements for nontaxable transfers between retirement accounts from transfer obligations. Fidelity's current IRA FAQ says Fidelity Crypto IRAs remain unavailable in California and Oregon.

Fidelity's IRA FAQ says crypto transfers are unavailable wherever Fidelity Crypto IRAs are offered. The FAQ says customers cannot withdraw money or crypto directly from a Fidelity Crypto IRA. The FAQ says customers can instead move money from the Fidelity Crypto IRA's U.S. dollar position to the linked Fidelity brokerage IRA. Customers can then use the linked Fidelity brokerage IRA's withdrawal features.