Lawmakers Urge Fidelity To Drop Bitcoin Retirement Plan After FTX Crash

By Kevin • November 22, 2022 6:13 pm • Comments

It looks like the recent collapse of FTX is now being used as an example for lawmakers to urge for the removal of the Bitcoin Retirement Plan that Fidelity recently offered.

Some of the lawmakers that are trying to make this push include Senator Elizabeth Warren and Tina Smith of Minnesota where they all signed a letter that asked Fidelity to remove the 401(k) Bitcoin plan.

Whether or not the company will actually listen to the lawmakers is debatable.

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After all, the company had decided to do this after listening to the demands of its clients and has already allowed products for companies to allow their employees access to Bitcoin.

Currently, Fidelity is still considered one of the world’s largest asset managers and is America’s biggest provider of 401(k) savings accounts.

DeCrypto.co reports:

But in May, the Senators Warren and Smith sent a letter to Fidelity telling them it was a bad idea. This time round, a new letter was sent, additionally signed by Senator Durbin.

“Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to Bitcoin,” Monday’s letter said.

“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems,” the senators added.“

The industry is full of charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisors promoting financial products with little to no transparency.”

The documents show right now that FTX owes around $3.1 billion to its creditors which may have an impact on the crypto markets.

It was also noted that FTX was a large contributor to political campaigns which sparked a lot of investor interest as these contributions may be used to influence regulations on crypto.

The former CEO Sam Bankman-Fried has been known to be one of the top 20 largest donors for President Joe Biden’s campaign back in 2020.

So far, Fidelity seems to not be changing its position despite lawmakers being eager to use the FTX collapse as an “example” of the entire crypto industry.

DeCrypto.co concludes:

The crash rocked the crypto market and most digital assets have plunged following the news.
Today’s letter added that the U.S. was “already in a retirement security crisis” which “should not be made worse by exposing retirement savings to unnecessary risk.”

Fidelity currently has over $9.9 trillion under its administration and has made major inroads into the world of digital assets.

Earlier this month it announced an early-access waitlist for its latest crypto product: an app allowing retail investors trade Bitcoin and Ethereum from their phones without paying commission fees.

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