US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, ‘Serious Problems’ in Crypto Industry

US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, "Serious Problems" in Crypto Industry

Several U.S. senators have called on Fidelity Investments to reconsider allowing bitcoin in 401(k) retirement plans. “The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems,” the lawmakers told Fidelity CEO Abigail Johnson. US Senators Want Fidelity to Stop Offering Bitcoin in Retirement Plans

Three U.S. senators sent a letter to Fidelity Investments CEO Abigail Johnson Monday regarding the financial services firm’s bitcoin offerings in 401(k) retirement plans. The letter was signed by senators Elizabeth Warren (D-MA), Richard J. Durbin (D-IL), and Tina Smith (D-MN).

Reiterating their concerns about Fidelity allowing bitcoin exposure in retirement plans, the lawmakers stressed: “Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to bitcoin.”

They detailed: “Since our previous letter, the digital asset industry has only grown more volatile, tumultuous, and chaotic — all features of an asset class no plan sponsor or person saving for retirement should want to go anywhere near.” The senators continued: The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems. The industry is full of charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisors promoting financial products with little to no transparency.

Crypto exchange FTX filed for Chapter 11 bankruptcy on Nov. 11. The firm allegedly mishandled customer funds and is currently being investigated by several U.S. authorities, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

“As a result, the ill-advised, deceptive, and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets,” the lawmakers warned. “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.”

“In light of these risks and continuous warning signs, we again strongly urge Fidelity Investments to do what is best for plan sponsors and plan participants — seriously reconsider its decision to allow plan sponsors to offer bitcoin exposure to plan participants,” the lawmakers told Johnson, elaborating: By many measures, we are already in a retirement security crisis, and it should not be made worse by exposing retirement savings to unnecessary risk. Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail.

Fidelity’s decision to offer bitcoin investments in 401(k) plans has troubled the U.S. Department of Labor. “We have grave concerns with what Fidelity has done,” said Ali Khawar, acting assistant secretary of the Labor Department’s Employee Benefits Security Administration. Treasury Secretary Janet Yellen has also warned that crypto is “very risky,” emphasizing that it is unsuitable for most retirement savers.

Senator Warren already sent a letter to Johnson earlier this year demanding answers about the financial firm’s decision to allow bitcoin exposure in retirement products. In September, a number of U.S. lawmakers introduced a bill called the Retirement Savings Modernization Act to allow “workers to diversify assets” in 401(k) plans. Tags in this story 401k, bitcoin retirement plans, crypto 401(k), cryptocurrency 401(k), elizabeth warren bitcoin, elizabeth warren bitcoin 401(k), elizabeth warren crypto, fidelity, fidelity bitcoin 401k, fidelity bitcoin retirement plans, us senators, us senators bitcoin 401(k)

What do you think about U.S. senators urging Fidelity to reconsider allowing bitcoin investments in 401(k) plans? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. JPMorgan Chase Granted Wallet Trademark Covering Various Virtual Currency and Crypto Payment Services FEATURED | 6 hours ago Billionaire Bill Ackman: Crypto Enables Creation of Useful Businesses and "Is Here to Stay" FEATURED | 21 hours ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleNFT Sale Starts on December 17th! NFT Sale Details of Entertainment DAO Project ‘SUPER SAPIENSS’ by Director Yukihiko Tsutsumi, Katsuyuki Motohiro and Yuichi Sato Revealed Next articleJPMorgan Chase Granted Wallet Trademark Covering Various Virtual Currency and Crypto Payment Services Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItNFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales

Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40% Australia to List Bitcoin ETF After 4 Clearinghouse Participants Commit to Meet Stringent Margin Terms Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method