US senators urge Fidelity to reduce disclosure of its retirement plans for bitcoin

US senators urge Fidelity to reduce disclosure of its retirement plans for bitcoin

With over $9 trillion under its authority, Fidelity Investments is undoubtedly one of the largest asset managers in the world. One of its most popular offers in the United States is especially the one intended for retirees, the famous 401(k) savings account of which it is the largest provider in the country.

At the beginning of the year, the fund manager decided to offer this account exposure to bitcoin (BTC) to companies and their employees. However, three US Senators sent a letter yesterday to Fidelity Investments asking it to withdraw the offer.

Request justified by FTX failure

On November 21, Senators Richard Durbin, Elizabeth Warren, and Tina Smith sent a letter to Fidelity Investments CEO Abigail Johnson asking to end the disclosure of their retirement plan for bitcoin. “Once again, we urge Fidelity Investments to reconsider its decision to allow sponsors of 401(k) plans to expose participants to bitcoin,” the letter said.

This is the third such request sent to the fund manager, having been sent in May and July following Fidelity’s announcement. This time, the Senators relied on the failure of FTX, and its consequences for the economy, to justify their approach.

If they did not question the management done by Fidelity, the American senators instead pointed out the lack of transparency of the crypto industry, and the presence of opportunistic fraudsters.

“The recent eruption of FTX, a cryptocurrency exchange, has clearly shown that the digital asset industry has serious problems. The industry is full of charismatic superstars, opportunistic scammers and self-proclaimed investment advisors who promote financial products with little or no transparency. »

Also read: FTX owes more than $3 billion to top 50 creditors

Avoid exacerbating the pension security crisis

Without saying it clearly, the three senators fear that the savings of American retirees could be diverted to purposes other than investing in bitcoin. The volatility of the cryptocurrency which has only fallen since the beginning of the year has also helped increase the fear of the latter.

“Since July, when we raised our concerns with you about the very worrying prospect of occupational pension plans being exposed to bitcoin, its value has plummeted. On July 26, one bitcoin was worth $21,239. Today, bitcoin is worth $16,884, the lowest level in two years. As the extent of the damage caused by FTX continues to develop, the infection is being felt across the digital asset market. Bitcoin is no exception. »

Finally, the senators recalled in their letter that the United States is going through a “retirement security crisis”, and that “it must be made worse by exposing retirement savings to unnecessary risks”.

Bitcoin - Week 47 - Cointribune

Bitcoin – Week 47 – Cointribune