Changelly

Cryptocurrency

Senator Elizabeth Warren Demands Answers From Fidelity for Allowing Bitcoin in Retirement Plans – Featured Bitcoin News

3 Mins read


Two U.S. senators, including Elizabeth Warren, have sent a letter to Fidelity Investments demanding answers regarding the company’s decision to allow bitcoin investments in 401(k) retirement plans. “Investing in cryptocurrencies is a risky and speculative gamble, and we are concerned that Fidelity would take these risks with millions of Americans’ retirement savings,” the lawmakers wrote.

US Lawmakers Concerned About Fidelity Allowing Bitcoin Investments in 401(k) Plans

U.S. Senator Elizabeth Warren (D-MA) has sent a letter to Abigail Johnson, the CEO of Fidelity Investments, questioning the financial services giant’s plan to allow bitcoin investments in 401(k) accounts. The letter, dated May 4, is also signed by U.S. Senator Tina Smith (D-MN).

The lawmakers wrote:

We write to inquire about the appropriateness of your company’s decision to add bitcoin to its 401(k) investment plan menu and the actions you will take to address ‘the significant risks of fraud, theft and loss’ posed by these assets.

The letter notes that Fidelity’s announcement followed the Department of Labor expressing “serious concerns” about cryptocurrency investment options in 401(k) plans, citing “significant risks of fraud, theft and loss” posed by crypto assets.

Senators Warren and Smith stressed:

In short, investing in cryptocurrencies is a risky and speculative gamble, and we are concerned that Fidelity would take these risks with millions of Americans’ retirement savings.

The two senators proceeded to highlight the volatility of bitcoin compared to stocks in the S&P 500. They also noted that the price of the cryptocurrency was influenced by Tesla CEO Elon Musk’s tweets and the “high concentration of bitcoin ownership and mining exacerbates these volatility risks.”

The lawmakers additionally warned:

We are also concerned about Fidelity’s potential conflicts of interest and the extent to which they may have affected the decision to offer bitcoin.

The letter references Fidelity’s announcement in 2017 that it had been mining cryptocurrency. Since then, the financial services firm has ramped up its crypto offerings, including offering its own crypto fund for wealthy customers.

With the latest announcement, the senators said: “Fidelity has decided to move full speed ahead with supporting bitcoin investments,” claiming that the firm is doing so “Despite a lack of demand for this option — only 2% of employers expressed interest in adding cryptocurrency to their 401(k) menu.”

In conclusion, the two senators asked Fidelity five questions and requested answers by May 18. They want to know why Fidelity ignores the Labor Department’s crypto warning, the details of the company’s bitcoin risk assessment, the fees customers will incur, how Fidelity addresses its own conflicts of interest, and how much the company has earned from crypto mining activities.

Tags in this story
401(k) bitcoin, 401K crypto, 401k cryptocurrency, abigail johnson, Bitcoin, Crypto, Cryptocurrency, fidelity, Fidelity Investments, retirement accounts Bitcoin, senator elizabeth warren, Senator Tina Smith, us senator elizabeth warren

What do you think about Senator Elizabeth Warren questioning Fidelity on its decision to allow bitcoin investments in retirement accounts? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.




Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





Source link

Related posts
Cryptocurrency

Coinsource Deploys 800 Bitcoin ATMs Across U.S.

1 Mins read
Coinsource is installing 800 bitcoin ATMs across midwestern Kwik Trip gas stations. Coinsource charges a flat 11% fee and offers a discount…
Cryptocurrency

The 10 most expensive NFTs sold to date

4 Mins read
Nonfungible tokens, or NFTs, are turning out to be a treasure store with prices striding into the millions of dollars. Instances of…
Cryptocurrency

Crypto Fees Explained + How to Pay Less in Bitcoin Fees

5 Mins read
Any crypto user will tell you the worst part of transacting in digital currencies is the fees attached to each and every…

Leave a Reply

Your email address will not be published. Required fields are marked *