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Several U.S. senators have called on Fidelity Investments to reconsider allowing bitcoin in 401(k) retirement plans. \u201cThe recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems,\u201d the lawmakers told Fidelity CEO Abigail Johnson.<\/strong><\/p>\n Three U.S. senators sent a letter to Fidelity Investments CEO Abigail Johnson Monday regarding the financial services firm\u2019s bitcoin offerings<\/a> 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).<\/p>\n Reiterating their concerns about Fidelity allowing bitcoin exposure in retirement plans, the lawmakers stressed: \u201cOnce again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to bitcoin.\u201d<\/p>\n They detailed: \u201cSince our previous letter<\/a>, the digital asset industry has only grown more volatile, tumultuous, and chaotic \u2014 all features of an asset class no plan sponsor or person saving for retirement should want to go anywhere near.\u201d The senators continued:<\/p>\n 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.<\/p>\n<\/blockquote>\n Crypto exchange FTX filed for Chapter 11 bankruptcy<\/a> on Nov. 11. The firm allegedly mishandled customer funds and is currently being investigated<\/a> by several U.S. authorities, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).<\/p>\n \u201cAs 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,\u201d the lawmakers warned. \u201cWhile 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.\u201d<\/p>\n \u201cIn 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 \u2014 seriously reconsider its decision to allow plan sponsors to offer bitcoin exposure to plan participants,\u201d the lawmakers told Johnson, elaborating:<\/p>\n 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.<\/p>\n<\/blockquote>\n Fidelity\u2019s decision to offer bitcoin investments in 401(k) plans has troubled the U.S. Department of Labor. \u201cWe have grave concerns with what Fidelity has done,\u201d said<\/a> Ali Khawar, acting assistant secretary of the Labor Department\u2019s Employee Benefits Security Administration. Treasury Secretary Janet Yellen has also warned<\/a> that crypto is \u201cvery risky,\u201d emphasizing that it is unsuitable for most retirement savers.<\/p>\n Senator Warren already sent a letter to Johnson earlier this year demanding<\/a> answers about the financial firm\u2019s decision to allow bitcoin exposure in retirement products. In September, a number of U.S. lawmakers introduced a bill<\/a> called the Retirement Savings Modernization Act to allow \u201cworkers to diversify assets\u201d in 401(k) plans.<\/p>\nUS Senators Want Fidelity to Stop Offering Bitcoin in Retirement Plans<\/h2>\n
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