Senator Warren demands answers from Fidelity and their Bitcoin retirement plans because she thinks that investing in crypto is quite risky and speculative so let’s read more today in our latest Bitcoin news.
The two US Senators including Elizabeth Warren sent a letter to Fidelity investments and demanded answers regarding the company’s decision to allow BTC investmetns in their 401K retirement plans so investing in crypto is a risky and speculative gamble and are concerned that Fidelity will take the risks with millions of American’s retirement savings. Senator Warren demands answers from Fidelity questioning the financial services giant’s plan to allow BTC investments in 401K accounts and the letter is also signed by US Senator Tina Smith. 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 noted that the Fidelity announcement followed the Department of Labor expressing serious concerns about crypto investmetns options in 401K plans due to significant risks of fraud, theft, and loss by crypto assets:
“In short, investing in cryptocurrencies is a risky and speculative gamble, and we are concerned that Fidelity would take these risks with millions of Americans’ retirement savings.”
The two senators proceeded to outline the volatility of BTC compared to stocks in the S&P 500 and noted the price of crypto was influenced by Tesla’s CEO Elon Musk and the high concentration of Bitcoin ownership surpasses these volatility risks. The lawmakers noted:
“We are also concerned about Fidelity’s potential conflicts of interest and the extent to which they may have affected the decision to offer bitcoin.”
The letter referenced Fidelity’s announcement in 2017 which was mining crypto and since then, the financial services company ramped up the crypto offerings including the offerings of its own fund for wealthy customers. In the latest announcement, the senators said that Fidelity decided to move full speed ahead and support BTC investmetns and claimed that the company is doing so despite a lack of demand for the option with 2% of employers expressing the interest in adding crypto to their 401K menu.
The two senators asked Fidelity five questions and requested more answers they want to know Why Fidelity ignores the Labor Department warnings with details of the company’s BTC risk assessment with the fees customers will incur and how Fidelity will incur of how fidelity addresses its own conflicts of interest and how the company earned from these mining activities.
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