In recent years in the United States, several pension plans have included cryptos in their pensions. The practice has grown significantly with the steady growth the industry has seen before the bear market began. Many businesses have flourished thanks to her. Recently, it has emerged that the reliance on cryptos has not been beneficial for many pension plans. They took the brunt of the shock wave in the market and lost money. This, by endangering the assets of their clients. Voices are now being raised to put an end to this system.
Cryptos, a danger for American pensions?
In the United States, New York State Attorney General Letitia James sent a letter to members of Congress, in which she calls for cryptos to be banned as an investment option for 401(k) retirement accounts. In the document, the official explained why it is important that the authorities adopt this measure.
“On behalf of the people of New York State, I urge Congress to pass legislation designating digital assets, for example, cryptos, digital coins, and digital tokens, as assets that cannot be purchased with funds from retirement accounts.
Clearly, it indicates that this asset class has no intrinsic value on which we can rely. She adds that cryptos do not give investors ownership or equity in a company. Nor do they represent the ownership of a creditor of a debt security such as the holder of a corporate bond. This, although they are often marketed as investments from which investors can expect to make profits. The prosecutor also noted the risky nature of cryptos, citing their volatility, fraud and lack of regulation.
As a reminder, Letitia James has always shown herself against the lack regulation of cryptos.
For her, unlike registered broker-dealers, crypto trading platforms can lack transparency. An element which, taken individually, is sufficient to prohibit the practice.
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