Fidelity Reaches $500,000 Settlement with California, Must Notify of Retail Crypto Transfer Suspension

California's Attorney General announced a $500,000 settlement with Fidelity Digital Assets to resolve disputes over restrictions on the transfer of crypto assets. Fidelity does not admit to any wrongdoing, and the funds will be used to cover investigation costs, not for customer compensation. The agreement stipulates that if Fidelity stops providing external wallet transfer functionality to ordinary retail customers, it must give reasonable written notice to California customers, although it may still restrict individual transfers to ensure platform or account security. Additionally, the agreement explicitly does not require external transfer functionality for tax-advantaged accounts such as Individual Retirement Accounts (IRAs) that are governed by federal law.

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