Fidelity Digital Assets Services applies for a New York Trust License

Jul 22 2019

Fidelity Crypto Arm Fidelity Digital Assets Services (FDAS) has solely applied for a license to operate as a trust in New York State.

FDAS has applied for a Trust License with the New York Department of Financial Services (NYDFS), Crypto media news outlet The Block reported on July 20, referring to some of the unnamed sources familiar with the matter.

According to the report, if the License is approved, FDAS will be allowed to provide its crypto custodial services in the New York state and also operate as a Limited Purpose Trust Company.

The latest application is one of the most recent development for Fidelity in its primary goal to provide a trading solution with Bitcoin, moving ahead with rivals such as Coinbase. In May, the company was allegedly trying to expand beyond its crypto business, and planning to launch broker services for the institutional clients. In order to develop their crypto business, the company is working with the traditional asset managers and crypto native firms, as per the people familiar with the situation.

Currently, Fidelity Digital Assets is in the same group just as Bakkt, the pending cryptocurrency of ICE, which has also submitted an application for a trust license is to be deemed as a qualified custodian. As per the lawyer from Gibson Dunn, Arthur Long stated that the trust license is much "more expensive" as compared to the BitLicense, a license for crypto firms in New York. By getting the trust license, the firm gets the opportunity to provide a wide range of services in the financial market along with financial advice. 

FDAS was released mainly as an offshoot of Fidelity in October last year. The firm launched crypto custody in the beginning of this year and hired Chris Tyrer from investment bank Barclays. Later in April 2019, FDAS hired Christine Sandler, a former executive of the leading American exchange Coinbase, as head of Sales and Marketing. Sandler joined the company to work as an institutional customer service.

Lately, Reuters said that social media platform Facebook applied with the NYDFS to obtain a crypto business license to work on its determined stablecoin Libra in New York.

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