Home » Fidelity Launches Its Crypto Service
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Fidelity Investments launches Fidelity Crypto. Bitcoin and Ethereum trading services for more than 40 million retail customers.
In Short
- Fidelity Crypto is now open for some customers.
- The company notified some users in an email
- U.S. senators criticized Fidelity’s crypto plans.
Fidelity Launches Its Crypto Service. Fidelity’s giant financial services firm is launching its highly anticipated retail cryptocurrency trading service. According to reports, the financial services giant emailed some customers this Monday.
The company announced the news via an email sent to some customers. “The wait is over,” Fidelity said in the statement, indicating that users need a brokerage account to fund their new Fidelity Crypto account, according to the publication. They communicated a month ago today after the U.S. asset management and pension fund company officially unveiled the new cryptocurrency product.
Early in November, Fidelity started a waitlist for access to its new cryptocurrency platform. The new service’s name is “Fidelity Crypto,” It will allow retail clients to trade Bitcoin and Ethereum directly. The move confirmed rumors about the company’s plans to provide a comprehensive cryptocurrency service to its users.
Notably, Fidelity was one of the first major U.S. financial firms to open up to digital assets, and since 2018 has offered Bitcoin trading to institutional clients. Fidelity Crypto will allow users to trade and custody the two major digital currencies commission-free by expanding this offering to retail clients for the first time. Users can trade cryptocurrencies directly from the company’s mobile app for as little as $1 with the “same institutional-grade security.”
Fidelity’s crypto offering worries lawmakers
The service will also offer a learning section for beginners and does not fail to warn about the risks associated with handling the new asset class. The company asked users trying to open an account to read and agree to a series of disclosures, including a risk statement. The notice stated that:
“Investing, buying, and selling digital assets presents a variety of risks that are not present when investing, buying, and selling products in other, more traditional asset classes.“
The advisory also reminded us that “digital assets can fluctuate rapidly and materially,” according to that report. The service indicated they would factor a 1% spread into each trade execution price. Despite the email announcement, the Crypto Fidelity official website still redirects visitors to a page to sign up for the waiting list. The news about the launch comes amid a challenging time for the digital asset sector, which was hit this month with the collapse of FTX, once one of the leading and most reputable crypto exchanges.
Meanwhile, U.S. regulators and lawmakers don’t seem enthusiastic about Fidelity’s efforts to get into cryptocurrencies. Last week, a group of U.S. senators called on the company to consider the Bitcoin exposure it offers through its 401(k) retirement accounts in light of the FTX scandal. The U.S. Department of Labor, the federal agency that regulates retirement plans, criticized the efforts in April, saying the offering raised “serious concerns.”
Lack of regulations
Worries about crypto are familiar since virtually no government has a solid regulation that covers different aspects of the crypto ecosystem. In particular, due to the ambiguity that Decentralized Autonomous Organizations (DAOs) constitute in the eyes of the law, the U.K. Law Commission initiated a consultation with experts and users to legally characterize Decentralized Autonomous Organizations in England and Wales.
Decentralized Autonomous Organizations are entities of a community or groups aligned with a common goal that uses Smart Contracts based on blockchain technology to build a decentralized, transparent, and open governance alternative to traditional models.
The responsibility of those who participate in DAOs, their legal status, and internal decision-making are among the aspects that need to be regulated. The legislation that applies to them and the parameters related to this governance model are also aspects to focus on. Its link with taxation, and money laundering, among other elements.
The Law Commission will conduct the call for ten weeks, until January 25, 2023, and they hope to eventually issue a report stating all the considerations on DAOs and how they can operate under U.K. laws.
As Decentralized Autonomous Organizations emerge as an increasingly adopted technology-based governance model and organizational structure, countries worldwide will use formulas to establish legal and regulatory parameters. For now, progress in this regard is quite scarce with very particular cases and initiatives in certain jurisdictions.
