US Senators Elizabeth Warren, Tina Smith and Richard Durbin have again called on Fidelity Investments to reconsider its offer of a bitcoin (BTC)-linked 401(k) retirement product.
In a letter to Fidelity Investments CEO Abigail Johnson on November 21, the three senators said FTX’s recent crash is more than enough reason for the $4.5 trillion asset management firm to reconsider its bitcoin offering for retirement savers, stating:
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear that the digital asset industry is in deep trouble.”
The senators also added that “charismatic prodigies, opportunistic con artists and self-proclaimed investment advisers” have played a large role in bitcoin price manipulation, which in turn has affected 401(k) holders who have invested in Fidelity’s bitcoin product:
“Since July, when we last raised our concerns about the deeply troubling prospect of exposing jobs retirement plans to bitcoin, its value has plummeted.”
“While the full extent of the damage caused by FTX continues to unfold, the contagion is being felt across the broader digital asset market. Bitcoin is no exception,” they commented. the senators.
The senators’ letter to the Fidelity CEO was the second in recent months; the first letter on July 26 demanded an explanation as to why Fidelity decided to expose its clients to a bitcoin 401(k) product in the first place.
“Since we wrote our previous letter, the digital asset industry has become more volatile, tumultuous and chaotic, all the hallmarks of an asset class that no plan sponsor or person saving for retirement should approach,” the senators wrote.
The implosion of FTX has made it clear that the digital asset industry has serious problems. I joined @SenWarren & @SenTinaSmith to urge Fidelity to do what is best & reconsider its decision to expose retirement accounts & employer-sponsored plans to these volatile assets. pic.twitter.com/qQn4PF80AP
—Senator Dick Durbin (@SenatorDurbin) November 21, 2022
The FTX implosion has made it clear that the digital asset industry is in deep trouble. I joined @SenWarren and @SenTinaSmith in urging Fidelity to do its best and reconsider its decision to expose retirement accounts and employer-sponsored plans to these volatile assets.
Durbin, Smith, and Warren also noted that Some 32 million Americans and 22,000 US employers use Fidelity as a work retirement account and employer-sponsored plan.
The senators added that Given the nation’s already unfolding retirement security crisis, Fidelity should not be exposing its clients’ retirement savings to “unnecessary risk.”
“In light of these risks and continuing red flags, we again strongly urge Fidelity Investments to do what is best for plan sponsors and participants: seriously reconsider its decision to allow plan sponsors to offer bitcoin exposure. “
Cointelegraph reached out to Fidelity for comment on the letter, but did not immediately receive a response.
For his part, not all US lawmakers have sided with the three crypto-skeptic senators in the past.
In May 2022, Republican Senator Tommy Tuberville introduced the Financial Freedom Act in the US Congress, which serves to allow US residents to add cryptocurrency to their 401(k) retirement savings plan without being subject to regulatory influence.
Fidelity has continued to increase its investment in the digital asset space; plans to expand its digital assets division by 25% with 100 new employees by the end of the first quarter of 2023.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here 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.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.
