US senators urge Fidelity to rethink its Bitcoin choices after FTX blow-up

United States senators Elizabeth Warren, Tina Smith, and Richard Durbin have renewed their requires Fidelity Investments to rethink providing a Bitcoin (BTC)-linked 401(ok) retirement product. 

In a letter addressed to Fidelity Investments CEO Abigail Johnson on Nov. 21, the three senators mentioned the latest fall of FTX is extra motive than any for the $4.5 million asset administration agency to rethink its Bitcoin providing 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 additionally added that “charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisors” have performed an enormous function in manipulating the value of Bitcoin (BTC), which in flip has impacted 401(ok) retirement financial savings holders who’ve 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 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 commented.

The senators’ letter to the Fidelity CEO was the second in latest months, with the first letter on Jul. 26 demanding an explanation of why Fidelity decided to expose its customers to a Bitcoin 401(k) product to begin with.

“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

Durbin, Smith and Warren additionally famous that some 32 million Individuals and 22,000 U.S. employers use Fidelity as a office retirement account and employer-sponsored plan.

The senators added that with a retirement safety disaster already enjoying out within the nation, Fidelity shouldn’t be exposing its buyer’s retirement financial savings to an “unnecessary risk.”

“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.”

Cointelegraph reached out to Fidelity for his or her touch upon the letter however didn’t obtain a direct response.

Associated: Fidelity’s crypto ambitions are bigger than expected: report

In the meantime, not all U.S. lawmakers seem to have sided with the three crypto-skeptic senators prior to now. 

In Might. 2022, Republican Senator Tommy Tuberville introduced the Financial Freedom Act into the U.S. Congress, which serves to permit U.S. residents so as to add cryptocurrency to their 401(ok) retirement financial savings plan with out being topic to regulatory affect.

Fidelity has continued to extend its funding within the digital asset area, with plans to expand its digital asset division by 25% with 100 new workers by the tip of Q1 2023.

Source link

#senators #urge #Fidelity #rethink #Bitcoin #choices #FTX #blowup