The senators skeptical of cryptocurrencies claimed that the FTX crash made it “abundantly evident” that the market for digital assets has “severe difficulties.”
Senators Tina Smith, Elizabeth Warren, and Richard Durbin have reaffirmed their requests for Fidelity Investments to rethink providing a 401(k) retirement package connected to Bitcoin (BTC).
Is Company Rethink About Bitcoin Retirement Investor
The three senators urged the $4.5 trillion asset management company to rethink its Bitcoin offering to retirement investors in a letter sent to Fidelity Investments CEO Abigail Johnson on November 21. They stated:
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.”
The senators also stated that “charismatic wunderkinder, opportunistic scammers, and self-proclaimed investment consultants” have significantly damaged 401(k) retirement savings holders who have invested in Fidelity’s Bitcoin product by manipulating the price of Bitcoin (BTC):
“Since July, when we last raised concerns with you about the deeply concerning prospect of exposing workplace 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,”the senators said.
Why Company Initially Chose To Expose Its Customers
The senators’ latest letter to the CEO of Fidelity follows a letter they sent on July 26 asking why the company initially chose to expose its customers to a Bitcoin 401(k) program.
“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 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
Approximately 32 million Americans and 22,000 U.S. organizations utilize Fidelity as a workplace retirement account and an employer-sponsored plan, according to Durbin, Smith, and Warren.
The senators continued by saying that Fidelity shouldn’t be subjecting its customers’ retirement assets to an “unnecessary danger” given the nation’s current retirement security dilemma.
Is Bitcoin Allow Plan Sponsors
“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.”
However, not all American legislators seem to have previously supported the three senators who are crypto-skeptics.
What Investor Permits American Regulatory Interference?
The Financial Freedom Act, sponsored by Republican Senator Tommy Tuberville in May 2022, would permit Americans to include bitcoin in their 401(k) retirement savings plans without being subject to regulatory interference.
Fidelity has continued to boost its investment in the digital asset market and has plans to add 100 additional staff and 25% more space to its digital asset division by the end of Q1 2023