Fidelity’s digital assets arm applied for New York trust License
Several financial companies are jumping on crypto bang wagon for some assure 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 previous year to offer crypto-custody services to large size institutions and organizations. Fidelity Digital Assets Services (FDAS), has recently filed to secure New York trust license which will enable the firm to serve its clients in New York in all sort of crypto businesses.
Digging deep into the matter, sources familiar with the matter said that Fidelity Digital Assets has officially applied to the New York Department of Financial Services (NYDFS) to be a New York Trust which in result will expand the company’s reach in crypto space. currently, the company is offering crypto-custodian services in few states and if the application will be approved State of New York will be added on their list of States. The company is also planning to expand its storage business with crypto trading solutions and investment options as reported by Bloomberg in May. The firm may go beyond to offer broker services to trade on behalf of institutional clients.
This move will directly put Fidelity Digital Assets Services in competition with popular crypto exchanges and custodian services providers such as Coinbase, Gemini and Paxos. Coinbase has secured its place as a safe and sound crypto-custodian in October 2018.
Not only Fidelity’s crypto arm but ICE’s crypto platform, Bakkt, has also applied for Trust license which is considered to be more expensive and important compared to acquiring 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 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,” Arthur said.
Fidelity Digital Assets head Tom Jessop told The Block during the interview that the firm is being an intermediary on which clients can rely on when engaged with cryptos.
“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 said. The firm may further offer a platform that will not only reduce an administrative risk but also find the best price for crypto.