Senator Warren challenges Fidelity over its Bitcoin 401(k) plans

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Sen­a­tor Eliz­a­beth War­ren and Tina Smith have writ­ten a let­ter to Fideli­ty over its deci­sion to allow Bit­coin invest­ments in its 401(k) plans. 

The let­ter asked the invest­ment firm why it failed to heed the Depart­ment of Labor (DOL) warn­ing regard­ing cryp­to invest­ments as part of pen­sion retire­ment plans.

Senator Warren questions Fidelity Bitcoin decision

The let­ter also raised con­cerns about the con­flict of inter­est, giv­en that Fideli­ty is a Bit­coin min­er and man­ages cryp­to invest­ments for its wealthy clients. A part of the let­ter asked what the com­pa­ny plans to do regard­ing the risks of cryp­to assets.

Sen­a­tor War­ren is one of the most vocal anti-cryp­to voic­es in the US Sen­ate. The Mass­a­chu­setts sen­a­tor has crit­i­cized the indus­try and recent­ly spon­sored a bill to block cryp­to com­pa­nies from deal­ing with sanc­tioned entities.

Senator Tuberville supports Bitcoin investments for pension

While Sen­a­tor War­ren and Sen­a­tor Smith might have some skep­ti­cism about cryp­to invest­ments in pen­sion funds, Sen­a­tor Tom­my Tuberville is look­ing to counter any attempt by the DOL to ban Bit­coin invest­ments as part of retire­ment plans. 

The Repub­li­can sen­a­tor recent­ly intro­duced the Finan­cial Free­dom Act bill, which would grant cit­i­zens of the coun­try the right to invest their mon­ey in any invest­ment vehicle.

In his 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.

He con­tin­ued that the DOL has no pow­er to

Lim­it the range or type of invest­ments retire­ment savers can select.

Many seem to share his views because cryp­to assets as part of retire­ment plans are becom­ing more com­mon. Fair­fax Coun­ty in Vir­ginia recent­ly announced its plans to invest pen­sion funds into yield farming.

Department of Labor cautions against crypto investments for pensions

With sev­er­al invest­ment firms mar­ket­ing cryp­to invest­ment as a viable option for retire­ment plans, the DOL has been forced to cau­tion these firms about this investment.

In March, it pub­lished a Com­pli­ance Assis­tance Release, which dis­cussed the risks of cryp­to invest­ments to retire­ment plans and remind­ed fidu­cia­ries of their duties. DOL specif­i­cal­ly ques­tioned whether it’s a smart deci­sion for fidu­cia­ries to pro­vide cryp­to assets expo­sure to 401(k) plan par­tic­i­pants, giv­en the volatile nature of this invest­ment class.

Fideli­ty, how­ev­er, does not think that its Bit­coin 401(k) invest­ment plan goes against the com­pli­ance doc­u­ment as it has urged the Depart­ment to guide the industry.



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