Senators Once Again Ask Fidelity to Stop Offering Bitcoin in 401(k)s

Three Senators reckon crypto is full of “charismatic wunderkinds and opportunistic fraudsters,” urging Fidelity to avoid bitcoin in 401(k)s

article-image

Senator Elizabeth Warren | Source: Shutterstock

share

Three US Senators have urged Fidelity to stop its 401(k) sponsor partners from offering bitcoin exposure — likening crypto investing to “catching lightning in a bottle.”

In a Monday letter penned to Fidelity CEO Abigail Johnson, Democrat Senators Elizabeth Warren, Dick Durbin and Tina Smith argue that crypto markets have become riskier following FTX’s sudden collapse, making bitcoin unsuitable for retirement plans.

The Senators described the crypto industry as “full of charismatic wunderkinds, opportunistic fraudsters and self-proclaimed investment advisors promoting financial products with little to no transparency.”

“As a result, the ill-advised, deceptive, and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets,” they said. Durbin received $2,900 in campaign contributions from disgraced FTX CEO Sam Bankman-Fried, money he reportedly says will be donated to charity.

The letter follows similar pleas in May and July. Senators Warren and Smith have previously cited the cryptocurrency sector’s murky valuations as reason for caution, labeling investing in digital assets a “speculative gamble.”

Boston-based Fidelity began allowing employees to put as much as 20% of their retirement savings into bitcoin exposure this fall.

The crypto industry considered the move a strong sign of shifting institutional sentiment toward the 12 year old asset class, although bitcoin has shed some 60% of its value since Fidelity flagged the 401(k) move in late April.

Fidelity, which overall boasts some $9.6 trillion in assets under administration, is the largest individual retirement plan (IRA) provider in the US — supporting more than 35 million IRA, 401(k) and 403(b) retirement accounts. As of 2020, FIdelity controlled more than a third of the retirement fund market in the US, maintaining $2.4 trillion in 401(k) assets.

“Any investment strategy based on catching lightning in a bottle, or motivated by the fear of missing out, is doomed to fail,” the Senators said.

“By many measures, we are already in a retirement security crisis, and it should not be made worse by exposing retirement savings to unnecessary risk.”


Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.


Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.


Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


Tags

upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

The State of LSTFi

Research

There are five broad use cases for LSTs that are gaining traction alongside growth in demand: leverage farming, liquidity providing, LST baskets, stablecoin collateral, and interest rate derivatives.

/

article-image

The 7-day average trading volumes for bitcoin have dropped to their lowest level in two and a half years alongside a muted derivatives market

article-image

Alexander Vinnik’s lawyers aim to swap his freedom for detained WSJ reporter Evan Gershkovich

article-image

This latest update will introduce immutability to token metadata but ensure that its key characteristics are preserved, and it will also introduce network fees

article-image

In a blog post, partly directed at the forthcoming Eigenlayer protocol, the Ethereum co-founder cautions against overloading consensus

article-image

Hunting for victims in Ethereum’s public mempool, automated searchers prey on transactions as they are discovered in a practice called MEV

article-image

The crypto exchange that filed for bankruptcy last November would endure a long road to raise funds, clear debts and gain trust, law pros say