Fidelity’s Digital Assets Department Seeks New York State’s Trust License

Fidelity Crypto Arm

Several financial companies are jumping on the crypto bang wagon for some promising reasons. Fidelity, an American multinational financial services corporation based in Boston, has launched its digital assets arm, Fidelity Digital Assets Services (FDAS) back in October 2018 to offer crypto-custody services to large size institutions and organizations.

Fidelity has recently filed to secure New York trust license which will enable the firm to serve its clients in New York in all sorts of crypto businesses.

Digging deeper into the matter, sources familiar with the matter told the digital asset news outlet The Block that Fidelity Digital Assets has officially applied to become a New York Trust with the New York Department of Financial Services (NYDFS) which in result will expand the company’s reach in the crypto space.

Currently, the company is offering crypto-custodian services in a few states and if the application will be approved, the State of New York will be added to its list of states in which Fidelity operates. The company is also planning to expand its storage business with crypto trading solutions and investment options as reported in May. The firm may go even beyond to offer broker services to trade on behalf of institutional clients.

This move will put Fidelity Digital Assets Services in direct competition of popular crypto exchanges and custodian service providers such as Coinbase, Gemini and Paxos. Coinbase has secured its place as a safe and sound crypto-custodian in October 2018.

Trust License Instead of BitLicense

Not only Fidelity’s crypto arm but Intercontinental Exchange’s (ICE) crypto platform, Bakkt, has also applied for the same trust license which is considered to be more expensive and important compared to acquiring New York’s BitLicense.

According to a lawyer from Gibson Dunn, Arthur Long, the trust license is “more expansive” than the famed BitLicense, a New York State license for crypto firms. He further told The Block that securing a New York Trust license from the NYDFS often takes half a year and sometimes more. Hence, it could take some time for Fidelity’s crypto arm to acquire the license. “Any bank or trust company is going to have to go through a substantial process so that the regulators understand the business,” Long said.

Fidelity Digital Assets head Tom Jessop also affirmed that the firm is being an intermediary on which clients can rely on when they engaged with cryptocurrency. He stated:

“Our clients want to avoid the issues associated with funding on multiple exchanges, both administrative risks, or otherwise, they want something resembling the best price experience, and so we’ll try to do that by bringing liquidity providers, and other sources of liquidity onto our platform.”

He further added that the firm may offer a platform that will not only reduce the administrative risk but might also find the best cost for cryptocurrency trading.

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