Fidelity’s Crypto-Focused Spin-Off Applies For Trust License In New York

News, Regulation | July 22, 2019 By:

Fidelity Digital Assets (FDAS), the digital currency wing of US financial services giant Fidelity, has reportedly applied for a trust license at the New York Department of Financial Services (NYDFS).

Citing sources familiar with the matter, The Block reported that the trust license will allow FDAS to operate as a Limited Purpose Trust Company and provide crypto custodial services in New York.

Arthur Long, a lawyer from Gibson Dunn, told the publication that the trust license is “more expansive” than the NYDFS BitLicense, a New York State license for crypto firms.

“A trust license allows a firm to operate a broader swath of services in financial markets, such as financial advice, hinting at far reaching ambitions,” Long said. “The process of securing the heavily-guarded green-light from the NYDFS often takes half a year. Any bank or trust company is going to have to go through a substantial process so that the regulators understand the business.”

The news came after Fidelity announced plans to offer over-the-counter (OTC) trades for bitcoin, which will be operated by FDAS. Fidelity said that the OTC platform will only target institutional customers and not retail investors like cryptocurrency trading platforms E*trade and Robinhood.