Senator Elizabeth Warren Questions Fidelity For Allowing Bitcoin In 401(k) Plans

May 7, 2022 6:43 pm

Fidelity’s recent move to allow Bitcoin into its 401(k) retirement plans marked a new milestone for the use of digital assets and indicates the beginning of a new tremendous pool of capital that will now be entering the crypto industry.

Many within the crypto community supported the move by Fidelity due to all the potential benefits that this would have for crypto holders.

After all, assets that are invested in using a 401(k) account are not subject to taxes and allows people to use their accounts to benefit from the growth that digital assets have experienced in the past few years.

With that being said, it looks like it is getting criticized by some “traditional” members of Congress that opposed the recent decision.

This was expected though as anything that is ground-breaking usually meets resistance from the mainstream.

Bitcoin.com reports:

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.

Essentially, the senators are asking Fidelity a variety questions such as why they ignored the labor department’s warnings and are expected to get an answer sometime by May 18.

Of course, many within the crypto community disagreed with Warren’s assessment as Fidelity is only providing more investment options for its customers.

It is not forcing anyone to invest in crypto, but is just giving them the freedom to do so if they want to.

As a result, many within the crypto industry believe that this is an attempt from the government to try to control how people utilize their money instead of giving them the freedom to use it how they want.

CoinDesk reports:

They asked Fidelity to say how it assesses risks of volatility, fraud, theft and the evolving regulatory environment and how it plans to address them.

Warren has previously expressed skepticism about the crypto industry.

In March, she introduced a bill to block cryptocurrency firms from conducting business with sanctioned companies. There is broad consensus in the blockchain industry that crypto is not used to work around sanctions.

She has also questioned mining firms over their energy usage and is a proponent of the U.S. developing a central bank digital currency (CBDC), seen by some as a challenge and means of restricting private cryptocurrencies and stablecoins.

Going forward, there may be more and more pushback when “traditional” institutions see how fast the industry is growing, but investors should have nothing to worry about if they believe in the potential of digital assets in the long-term.

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