US senators are calling for the second time on financial giant Fidelity to reconsider offering Bitcoin (BTC) as an investment in 401(k) retirement accounts.
In a letter to Fidelity CEO Abigail Johnson, US Senators Richard Durbin, Elizabeth Warren and Tina Smith say the recent collapse of the FTX crypto exchange underlines their position that Bitcoin is too risky a bet for workers’ retirement investments .
The senators had previously opposed the move when Fidelity announced the Bitcoin offering in April.
“In light of the recent stunning events in the digital asset market, we are writing today as a follow-up to our previous letter dated July 26, 2022. We once again strongly urge Fidelity Investments to reassess its decision to grant 401(k) to reconsider) plan sponsors to expose plan participants to Bitcoin. Since our last letter, the digital asset industry has only become more volatile, tumultuous and chaotic – all hallmarks of an asset class that no plan sponsor or person saving for retirement would want to approach.
They claim that a handful of young and charismatic people in the crypto space have been manipulating Bitcoin’s price. They point to a collapse in Bitcoin’s value of more than 20% after the FTX collapse.
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear that the digital asset industry is in serious trouble. The industry is full of charismatic prodigies, opportunistic fraudsters and self-proclaimed investment advisors who promote financial products with little to no transparency. As a result, the ill-advised, misleading and possibly illegal actions of a few have a direct impact on the valuation of Bitcoin and other digital assets.”
The senators say there is already a crisis with retiree savings, and adding more risky investments could exacerbate the situation. Fidelity is home to the retirement accounts of 32 million Americans and 22,000 employers.
“In light of these risks and continued warning signs, we once again strongly urge Fidelity Investments to do what is best for plan sponsors and plan participants – seriously reconsider its decision to allow plan sponsors to offer Bitcoin exposure to plan participants. offer. We are already in a pension crisis by many measures, and it should not be made worse by exposing pension savings to unnecessary risk. Any investment strategy based on lightning in a bottle or driven by the fear of missing out is doomed to fail.”
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