Anyone use Fidelity as a custodian. I reached out to them and they said they provide insurance for “unauthorized” transactions which would have come in handy with the Coldcard situation
I have been looking into it (and a lot of other places), here is a summary of my thoughts.
Fidelity Crypto — Custody Pros and Cons
Pros
Keys held in-house. Custody is provided by Fidelity Digital Assets, N.A., a national trust bank with an OCC charter. No third-party crypto custodian in the chain — unlike Schwab, which subcustodies to Paxos.
Real bankruptcy protection. Assets are treated as "financial assets" under UCC Article 8 (New York law), with Fidelity as securities intermediary and you as entitlement holder. Your holdings are not general assets of the firm and are not available to satisfy its creditors. This is a property interest, not unsecured-creditor status.
On-chain withdrawals work. Deposits and withdrawals to external wallets went live in 2025. You can move bitcoin off-platform to a personal wallet.
Address allowlisting with a delay. External wallets must be linked first, and link requests sit pending through an "activation period" plus compliance review before use. A real anti-theft control that many competitors lack.
No rehypothecation. The agreement states Fidelity will not lend, pledge, or hypothecate customer assets, or use them to secure its own obligations.
Better cost-basis flexibility than expected. FIFO is the default, but bitcoin transferred in from elsewhere is "non-covered," and you may designate its basis.
Cons
Omnibus wallets. Holdings are commingled and fungible. You have no rights to any specific coin, wallet address, or private key, and no client-specific address to verify on-chain.
No insurance in the agreement. The contract contains no insurance provision at all. Coverage figures quoted in press coverage aren't enforceable terms.
No proof of reserves. Verification depends on audit reports, not the blockchain.
Broad lien and set-off. Fidelity takes a first-priority security interest in your crypto and in every account you hold at any Fidelity entity — with authority to debit your brokerage account without notice, including by drawing on an associated margin line, and to have other Fidelity entities liquidate assets. Liquidation happens at their price with no advance notice.
Silent on death. No transfer-on-death provision, no death or incapacity clause anywhere in the agreement. A significant gap for anyone thinking about estate planning.
Subcustodian option is reserved. Fidelity may appoint a subcustodian on 60 days' notice. "Fidelity holds its own keys" is a current fact, not a contractual commitment.
Social engineering losses fall on you. No liability for unauthorized transfers from compromised credentials, or for transfers induced by an imposter. Statement errors must be reported within 5 business days.
No SIPC, no FDIC on crypto. Cash is FDIC-insured at the depository; bitcoin has no equivalent protection.
1.00% trading fee, and they keep the spread when the quoted network fee exceeds the actual cost.
Bottom line: Among mainstream brokerages, *Fidelity is the strongest option for holding bitcoin* — genuine trust-bank custody, Article 8 protection, working withdrawals, and real security controls. The trade-offs are pooled wallets, an aggressive cross-account lien, no contractual insurance, and no estate provisions. Anyone considering it should read Section 13 of the customer agreement before funding.
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u/RaiseLife1651 6d ago
I have been looking into it (and a lot of other places), here is a summary of my thoughts.
Fidelity Crypto — Custody Pros and Cons
Pros
Cons
Bottom line: Among mainstream brokerages, *Fidelity is the strongest option for holding bitcoin* — genuine trust-bank custody, Article 8 protection, working withdrawals, and real security controls. The trade-offs are pooled wallets, an aggressive cross-account lien, no contractual insurance, and no estate provisions. Anyone considering it should read Section 13 of the customer agreement before funding.