The crypto-skeptic senators advised the FTX collapse created it “abundantly clear” that the digital asset trade has “serious issues.”
United States senators Elizabeth Warren, Tina Smith and Richard Durbin have revived their necessitate Fidelity Investments to reconsider giving a Bitcoin (BTC)-linked 401(k) retirement product.
In a letter addressed to Fidelity Investments CEO Abigail Johnson on November. 21, the 3 senators said the recent fall of FTX is a lot of reason than any for the $4.5 trillion quality management firm to rethink its Bitcoin giving to retirement savers, stating:
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.”
The senators also added that “charismatic wunderkinds, opportunist fraudsters, and self-proclaimed investment advisors” have compete an enormous role in manipulating the value of Bitcoin, that successively has compact 401(k) retirement savings holders who have invested in Fidelity’s Bitcoin product:
“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 complete extent of the damage caused by FTX continues to unfold, the contagion is being felt across the broader digital quality market. Bitcoin is not any exception,” the senators commented.
The senators’ letter to the Fidelity CEO was the second in recent months, with the first letter on July 26 exacting an explanation of why Fidelity decided to expose its customers to a Bitcoin 401(k) product to start with.
“Since our previous letter, the digital quality trade has solely fully grown a lot of volatile, tumultuous, and chaotic—all options of an quality category no arrange sponsor or person saving for retirement ought to wish to travel anyplace close to,” the senators wrote.
A Fidelity advocator told that the corporate "has invariably prioritized operational excellence and client protection" and cited "recent events" within the crypto trade have "underscored the importance of standards and safeguards."
Durbin, Smith and Warren conjointly noted that some 32 million Americans and 22,000 U.S. employers use Fidelity as a work retirement and employer-sponsored plan.
The senators another that with a retirement security crisis already taking part in get in the country, Fidelity shouldn’t be exposing its customer’s retirement savings to an “unnecessary risk.”
“In light of these risks and continuous warning signs, we tend to once more strongly urge Fidelity Investments to try and do what's best for arrange sponsors and arrange participants—seriously rethink its call to permit arrange sponsors to supply Bitcoin exposure to arrange participants.”
Meanwhile, not all U.S. lawmakers seem to own sided with the 3 crypto-skeptic senators within the past.
In May. 2022, Republican legislator Tommy Tuberville introduced the money Freedom Act into the U.S. Congress, that serves to permit U.S. residents to feature cryptocurrency to their 401(k) retirement savings arrange while not being subject to restrictive influence.
Fidelity has continuing to extend its investment within the digital quality house, with plans to expand its digital quality division by twenty fifth with one hundred new staff by the top of Q1 2023.
( Brayden Lindrea, Cointelegraph, 2022 )