Senators Richard J. Durbin, Elisabeth Warren and Tina Smith sent a letter to Fidelity Investments CEO Abigail Johnson. Earlier this year, the company announced their decision to allow Bitcoin in the 401(k) retirement savings plan. These senators therefore sent a letter a few months ago asking Fidelity Investments to reconsider this offer. Fearing high risks in the crypto industry, they reiterated their request. One thing is certain, the fall of the FTX exchange continues to heighten the concerns of crypto-skeptics.
Senators urge Fidelity to reconsider offer following FTX collapse
It is undeniable that the collapse of the FTX has marked the entire crypto sector for several weeks. Other cryptos have been affected, including Bitcoin which is currently at its lowest level in two years. This is what senators imply in their letter asking the Fidelity company to rescind their offer to expose participants to Bitcoins. They consider that the crypto industry is becoming more and more “ volatile, tumultuous and chaotic ».
They indeed argue that the fall of the FTX has shown that the digital asset sector has serious problems. Entering this sector would expose retirement savings to unnecessary risks, the senators point out in their letter.
Fidelity Investments offers a Bitcoin savings plan
As a reminder, the digital asset management company has announced the possibility of investing part of their 401(k) savings plan in Bitcoin. The American senators then sent a letter to Fidelity on July 26, asking it to reconsider this offer. While many organizations decried the significant risks of investing in Bitcoin for retirement, Fidelity continues to invest in cryptos.
However, it should be noted that opinions are divided on this retirement plan system. In May 2022, Tommy Tuberville, a Republican Senator introduced the Financial Freedom Act to the US Congress. This will allow US residents to add crypto to their 401(k) savings plan without subjecting themselves to regulatory influence.
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