Two senators have raised concerns about Fidelity Investments’ plans to integrate Bitcoin (BTC) in 401(k) accounts, indicating that the U.S. government is becoming greatly worried about Bitcoin (BTC) in retirement savings.
Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota wrote to Fidelity CEO Abigail Johnson to voice their disagreements with the board’s plan to include BTC in its 401(k) investment plan.
The letter, dated May 4, claims a possible conflict of interest in Fidelity’s latest Bitcoin proposal, adding that the company has been actively involved in crypto since experimenting with BTC and Ether (ETH) mining activities and integrating Coinbase accounts in 2017.
Fidelity allows retirement savings to be used for crypto investments
Fidelity stated on April 26 that it would allow retirement savings to invest up to 20% of their portfolio in Bitcoin Cash (BTC), citing increasing client demand. Senators Warren and Smith, on the other hand, claimed that there was insufficient client demand for this option, noting:
“Despite a lack of demand for this option — only 2% of employers expressed interest in adding cryptocurrency to their 401(k) menu — Fidelity has decided to move full speed ahead with supporting Bitcoin investments.”
Crypto assets carry “significant risks of fraud, theft, and loss,” according to the letter. The senators cited a March statement from the Department of Labor (DOL) warning that large crypto investments in company-sponsored retirement funds could result in legal actions. The regulator also mentioned dangers such as “extreme volatility and high speculation” in cryptocurrencies, as well as custodial and recordkeeping difficulties.
“In short, investing in cryptocurrencies is a risky and speculative gamble,” the senators stated in the letter, “and we are concerned that Fidelity would take these risks with millions of Americans’ retirement savings.”
Notably, as TheCoinRise reported, Senator Warren introduced a bill to determine crypto’s role in ransomware.
Senators demanded answers from Fidelity on how they plan to resolve concerns identified by the DOL by May 18, 2022, to better comprehend the firm’s choice to embrace BTC for 401(k)s. They also wanted to know more about Bitcoin trading fees and how much money Fidelity made from its crypto mining businesses.
Sen. Warren is known for her tough stance toward crypto. Last year, she said that DeFi is the most dangerous part of the crypto industry.