Monday’s letter by the United States Senators to Fidelity Investments urged it to reconsider offering Bitcoin to customers after the collapse of cryptocurrency exchange FTX.
Senators Elizabeth Warren of Massachusetts and Tina Smith from Minnesota wrote Monday to CEO Abigail Johnson, asking that Fidelity Investment stop offering a 401(k), Bitcoin plan. Three senators cited the collapse of crypto exchange FTX as the reason Fidelity Investment’s $4.5 trillion asset management company decided to revise its Bitcoin offer to retirement savers.
In July, Senators Warren and Smith wrote a letter to Fidelity expressing concern about the offering. Senator Durbin responded to the request in the latest letter. Monday’s letter stated:
We urge Fidelity Investments once again to reconsider its decision to allow plan sponsors of 401(k), plans to expose participants to Bitcoin. Moreover, the recent collapse of FTX, a cryptocurrency exchange has highlighted the serious problems in this digital asset industry.
The letter also included the following comments:
The industry is full opportunistic fraudsters and charismatic wunderkinds. Self-proclaimed investment advisors promote financial products with little or no transparency.
The Senators continued their remarks by saying:
Its value has plunged since July, when we first raised concerns with you about the highly concerning prospect of exposing workplace retirement plans for Bitcoin. While the full extent and impact of FTX’s damage is still being seen, the spread of the virus is already evident in the wider digital asset market. Bitcoin is not an exception.
The digital asset industry has become more volatile, turbulent, and chaotic since our last letter. These are all characteristics of an asset class that no plan sponsor or person saving to retire should be able to afford.
Senators expressed concern over the existence of a retirement security crisis in the U.S. They said that Fidelity shouldn’t be exposing customers’ retirement savings to an “unnecessary” risk.
Disclaimer: This article is intended for informational purposes only. This article is not intended to be used for legal, tax, investment or financial advice.