Fidelity Investments, one of the world’s largest 401(k) providers, has been asked by three Democratic senators to refuse to allow retirement plan sponsors to reveal their members and employees to bitcoin and other cryptocurrency investments.
In a letter sent on Monday, Illinois Senator Dick Durbin, Massachusetts Senator Elizabeth Warren, and Minnesota Senator Tina Smith expressed concern about the cryptocurrency market’s volatility, which was highlighted by the breakdown and bankruptcy of FTX, the industry’s second-largest exchange. Meanwhile, bitcoin’s value has fallen to a two-year low of $16,209.
Retirement Plans In Bitcoin
A Fidelity spokesperson declined to address the senators’ specific concerns but stated that recent events in the digital asset industry have highlighted the importance of standards and safeguards. It first announced cryptocurrency investments in its 401(k) accounts earlier this year, citing growing interest from employers and employees.
The letter adds to the crypto world’s woes, which have been exacerbated by rapidly declining market values over the last year.
Durbin, Smith, and Warren also mentioned that Fidelity is used by 32 million Americans and 22,000 US employers as a workplace retirement account and employer-sponsored plan.
The senators decided to add that, with the country already facing a retirement security crisis, Fidelity should not be putting its customers’ retirement savings in danger.
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Other US Lawmakers Oppose
Meanwhile, not most US lawmakers seem to have previously supported the three crypto-skeptic senators.
Republican Senator Tommy Tuberville introduced the Financial Freedom Act in the United States Congress in May 2022, which allows US residents to add cryptocurrency to their 401(k) retirement savings plan without fear of regulatory repercussions.
Fidelity has increased its investment in the digital asset space, with plans to increase its digital asset division by 25% and hire 100 new employees by the end of Q1 2023.
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