California has secured a $500,000 settlement with Fidelity Digital Asset Services over restrictions that previously prevented some crypto customers from moving purchased coins to their own wallets. Attorney General Rob Bonta announced the settlement on October 16.
The core issue centers on self-custody rights: purchasing cryptocurrency through an app does not necessarily grant immediate access to withdraw it. California's commodity rules require certain transactions to involve physical delivery within a defined period. The state argued that cryptocurrency delivery requires buyers to transfer the asset away from the dealer.
Fidelity stated it had been waiting for approval from the New York Department of Financial Services before enabling external withdrawals. That permission arrived in April 2025, after which the company activated the functionality. While California asserts the earlier restrictions were unlawful, Fidelity disputes this conclusion.
The California Department of Justice connected its investigation to a prior case involving Robinhood Crypto, signaling a broader regulatory focus on consumer rights in crypto sales through traditional financial services platforms.
The settlement addresses a fundamental question regulators are examining: whether customers who purchase cryptocurrencies receive meaningful control over their holdings or only an internal account balance. The dollar amount is relatively modest for a company of Fidelity's size, but the principle carries wider implications for the industry. Investors should verify withdrawal availability and review the specific terms of their account rather than assume all Fidelity products operate identically.
