US senators call on Fidelity to explain the decision to include bitcoin in retirement plans

What’s new? US Senators Elizabeth Warren, Tina Smith, and Dick Durbin sent a letter to Fidelity Investments CEO Abigail Johnson demanding an explanation for the decision to provide customers with a service to invest funds from a 401(k) retirement account in bitcoin. Officials said that the company’s initiative was “immensely troubling” because BTC is “an untested, highly volatile” and unregulated asset.

Senators’ letter

What else does the letter say? The Democratic senators stressed that the money that American consumers can invest in retirement funds is “hard-earned” and their participation in “the cryptocurrency casino” is an overly ambitious move that will likely fail.

In May, Warren and Smith already criticized this initiative, calling investing in cryptocurrencies a “risky and speculative gamble” and also sending a letter to Abigail Johnson. They were concerned that Fidelity “would take these risks with millions of Americans’ retirement savings.”

The Department of Labor was also dissatisfied with the company’s proposal. According to the department’s representatives, bitcoin’s volatility poses the risk of losing retirement savings for “millions of US citizens.” After that, another crypto investment platform, ForUsAll, sued the department.

US Treasury Secretary Janet Yellen said after the announcement of Fidelity that Congress should regulate what assets can be included in retirement plans. She called investing in cryptocurrencies risky.

Fidelity announced a service to invest retirement in bitcoin on April 26. It is expected to become available in late 2022. If approved by employers, retirees will be able to invest up to 20% of their savings in bitcoin. MicroStrategy, the largest holder of BTC among public companies, already agreed to participate in the program.

What is known about Fidelity? It is a US financial services holding company. It was founded by Edward Johnson II in 1946. It was one of the first among financial institutions to get involved in cryptocurrencies. In 2018, the company launched its digital asset division.