United States Sen. Elizabeth Warren has written to Fidelity Investments CEO Abigail Johnson, expressing concern about the firm’s intention to enable Bitcoin in 401(k) plans. Senator Tina Smith of the United States also signed the letter, dated May 4.
Seeing as Fidelity manages crypto assets for its rich clients, the letter also sparked worries about a potential conflict of interest. A section of the letter inquired about the company’s strategy for dealing with the dangers associated with crypto assets. both queried if Fidelity had a potential conflicts of interest by allowing its over 20 million 401(k) members to invest in bitcoin.
The senator has always been a staunch critic of crypto. She has chastised the sector and has introduced legislation prohibiting crypto firms from working with sanctioned organizations.
When it revealed its proposal to allow customers to include Bitcoin in their retirement plans in late April, Fidelity Investments chose to ignore specific guidelines offered by the Department of Labor (DOL). As a result, the big asset managing business has entered the debate over federal cryptocurrency legislation.
“As a Massachusetts-based company with a proven 75-plus-year history of doing what’s in the best interest of our customers, we look forward to continuing our respectful dialogue with policy makers to responsibly provide access with all appropriate consumer protections and educational guidance for plan sponsors as they consider offering this innovative product.”
Fidelity
Finally, the senators sent five questions to Fidelity and asked for responses by May 18. They would like to understand how Fidelity overlooks the Labor Department’s warning against crypto, the specifics of the business’s bitcoin risk analysis, the costs clients will pay, how Fidelity manages its own conflicting interests, as well as how much money the company has made from cryptocurrency mining.
Senators Elizabeth and Smith may be wary of crypto assets in retirement funds, but Senator Tommy Tuberville wants to fight any move by the Department of Labor to prohibit Bitcoin investments in retirement plans. Fidelity Investments, on the other hand, does not believe that their Bitcoin 401(k) plan is in violation of the compliance document, and has encouraged the Department to provide guidance to the sector.
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Jai Hamid
Coincu News
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