Senators Elizabeth Warren and Tina Smith have written to Fidelity on the company’s decision to enable Bitcoin investments in its 401(k) programs.
The letter questioned the investment firm’s failure to follow the Department of Labor’s (DOL) warning about crypto investments in pension retirement plans.
The letter also expressed worry about a conflict of interest, considering that Fidelity is a Bitcoin miner and manages cryptocurrency assets for its rich customers. A section of the letter inquired as to what the corporation intends to do in light of the dangers associated with crypto assets.
Senator Warren is one of the most outspoken anti-crypto voices in the United States Senate. The Massachusetts senator has chastised the sector and has introduced legislation to prevent cryptocurrency firms from working with sanctioned groups.
While Senators Warren and Smith may be skeptical about crypto investments in pension funds, Senator Tommy Tuberville intends to fight any move by the DOL to prohibit Bitcoin investments in retirement plans.
The Republican senator recently presented the Financial Freedom Act bill, which would allow consumers to invest their money in any investment vehicle.
In his own words
The Federal Government has no business interfering with the ability of American workers to invest their 401(k) plan savings as they see fit.
Many people appear to agree with him, since crypto assets are increasingly being used in retirement plans. Virginia’s Fairfax County has announced plans to invest pension funds in produce farming.
With some financial firms promoting cryptocurrency as a viable choice for retirement plans, the DOL has been obliged to issue a warning to these firms regarding this investment.
It issued a Compliance Assistance Release in March that outlined the hazards of crypto investments to retirement plans and reminded fiduciaries of their responsibilities. Given the unpredictable nature of this investment class, the DOL expressly questioned whether it is a wise idea for fiduciaries to provide crypto assets exposure to 401(k) plan members.