Alabama Republican Senator Tommy Tubervillehas introduced a new bill called the Financial Freedom Act to allow Americans to add cryptocurrency to their 401(k) retirement savings plan without being subject to regulatory guidelines.
The new bill is Tuberville’s response to pressure from the United States Department of Labor (DOL) to potentially keep cryptocurrencies out of 401(k) investment plans due to their perceived potential risk to investors. As Cointelegraph previously reported, the DOL said that employees who decide to invest in cryptocurrency through their 401(k) could attract legal attention.
In an opinion piece for CNBC on Thursday, Senator Tuberville stated:
“The Federal Government has no business interfering with the ability of working Americans to invest their 401(k) savings as they see fit.”
He said the DOL’s March 10 policy change against employees using brokerage windows to self-direct their income investments is “inconsistent with long-standing practice.”
NEW BILL ALERT: I just introduced the #FinancialFreedomActallowing retirement savers to invest their 401(k) funds as they see fit.
The government should not be in the business of telling retirement savers how they can invest their money.https://t.co/6LGtpxquOW
— Coach Tommy Tuberville (@SenTuberville) May 5, 2022
Brokerage windows allow 401(k) plan investors to control their account investments rather than accept what their firm’s broker chooses for them. The senator continued:
“The agency’s new guidance ends this tradition of economic empowerment in favor of Big Brother government control. In addition, the Department of Labor’s overblown guidance is intended to impose a huge new regulatory burden on trustees of 401(k) plans.” ) by requiring them to assess the suitability of investments offered through a brokerage window and to restrict investment choices.”
Investment management firm Fidelity Investments said on April 26 that it would begin allowing its clients to include Bitcoin (BTC) in their 401(k) accounts. This caused Democratic senators Elizabeth Warren and Tim Smith argued in a letter to Fidelity CEO Abigail Johnson that there could be a conflict of interest, given that the firm has been handling cryptocurrency products since 2017. They also mentioned that cryptocurrency investments carry “significant risks of fraud, theft, and loss.”
Senator Warren is a staunch opponent of crypto investments, and the last year he referred to the sector as the “new shadow bank”.
Although the new DOL guidance does not mention Fidelity specifically, points out that their abuses of monetary law through cryptocurrency could lead to the closure of trading platforms, which ultimately hurts investors.
Senator Tuberville promised that the Financial Freedom Act would prohibit the Department of Labor from limiting the types of investments a self-directed 401(k) retirement plan can invest in. He succinctly stated at the end of his op-ed that: “The Department of Labor should not be able to limit the range or type of investments that retirement savers can select from.”
“Whether or not you believe in the long-term economic prospects of cryptocurrencies, the choice of what you invest your retirement savings in should be yours, not the government’s.”
So far, no other senator has publicly stated his support for the new bill. He would have to get a majority vote in the Senate to go to the House of Representatives for review. Democrats currently control the majority in the Senate, making passage of the legislation a steep and uphill battle. However, Tuberville has made his point of view clear.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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