Fidelity Digital Assets Applied for a Trust License in NY
Allegedly, Fidelitys cryptocurrency investment arm filed an application with the New York Department of Financial Service (NYFDS) and if approved the institutional brokerage will be allowed to offer crypto-custodial services in the state.
Fidelity Digital Assets allegedly applied to the New York Department of Financial Services (NYDFS) for a Trust license. If the application shows up to be a success, Fidelity Digital Assets (FDAS) would be cleared to add New York to the handful of states in which it currently operates its custody business for digital assets.
Gibson Dunns lawyer Arthur Long said that the trust license is wider than BitLicense, NYDFS typical crypto license, in a way that it enables its carrier to operate more financial services like financial advice for example.
He also said that it could take some time for FDAS to be granted the license, which would allow it to operate as a Limited Purpose Trust Company. He 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.
ICEs Bakkt Bitcoin exchange is also awaiting approval from NYDFS and after that, the exchange will become Fidelitys direct competitor. Lets also not forget Facebook who also applied with the NYDFS to acquire a cryptocurrency business license to operate its planned stablecoin Libra.
In April this year, FDAS hired Christine Sandler, ex. Coinbases executive, as head of Sales and Marketing. Sandler joined the firm to lead institutional customers service.
A month after, it was announced that the company is widening its business was beyond just custody. That meant also preparing for the launch of broker services to trade on behalf of institutional clients. On the custody side, the firm has been courting traditional asset managers as well as crypto native firms, according to people familiar with the situation.
The news about this application was pretty good taken by investors in the digital assets domain, even though some analysts claim that retail investors would probably need to wait a little bit longer in order to scoop some gains of this new development.
FDAS head Tom Jessop recently noted:
We are not prop trading, we dont have a desk. We are purely acting as effectively an agent, and thats what our clients want. Our clients want to avoid the issues associated with funding on multiple exchanges, both administrati ...