U.S. Senators Elizabeth Warren, Tina Smith and Richard Durbin have renewed their call for Fidelity Investments to reconsider offering a Bitcoin (BTC)-linked 401(k) retirement product.
in a letter Speaking to Fidelity Investments CEO Abigail Johnson on Nov. 21, the three senators said the recent decline in FTX was a sign the $4.5 million asset manager was rethinking its commitment to retirement savers. Top reasons for offering bitcoin products, stating:
“The recent debacle of cryptocurrency exchange FTX clearly shows that there are serious problems in the digital asset industry.”
The senator also added that “charismatic wunderkinds, opportunistic charlatans, and self-appointed investment advisors” have played a huge role in manipulating the price of Bitcoin (BTC), which in turn affects 401(k)s invested in Bitcoin. Fidelity’s Bitcoin Products for Retirement Savings Holders:
“Since July, when we last expressed to you the deeply worrying prospect of exposing workplace retirement plans to Bitcoin, its value has plummeted.”
“While the full extent of the damage caused by FTX continues to be revealed, the wider digital asset market is spreading. Bitcoin is no exception,” the Senator commented.
The senator’s letter to Fidelity’s CEO is the second in recent months, the first being on July 26, asking for an explanation of why Fidelity decided to expose clients to a bitcoin 401(k) product.
“Since our last letter, the digital asset industry has grown more volatile, volatile, and chaotic — and no plan sponsor or person saving for retirement should have access to all the characteristics of the asset class,” the senators wrote.
Durbin, Smith, and Warren also noted that approximately 32 million Americans and 22,000 US employers use Fidelity for workplace retirement accounts and employer-sponsored plans.
The senator added that with the retirement security crisis already playing out in the country, Fidelity should not put its clients’ retirement savings at “unnecessary risk.”
“Given these risks and the continued warning signs, we again strongly urge Fidelity Investments to do what is best for plan sponsors and plan participants – seriously reconsider its policy of allowing plan sponsors to provide plan participants with exposure to Bitcoin Decide.”
Cointelegraph reached out to Fidelity for comment on the letter, but did not immediately hear back.
related: Fidelity’s crypto ambitions are bigger than expected: report
Meanwhile, not all U.S. lawmakers have seemed to side with the three crypto-skeptical senators in the past.
in May. In 2022, Republican Senator Tommy Tuberville introduced the Financial Freedom Act into the U.S. Congress, which aims to allow U.S. residents to include cryptocurrencies in their 401(k) retirement savings plans without regulatory repercussions.
Fidelity continues to increase investment in the digital asset field, planning to expand its digital asset department by 25% and add 100 employees by the end of the first quarter of 2023.