Senator Elizabeth Warren expresses concern about Fidelity’s bitcoin retirement plan

US-based retirement plan provider Fidelity must address risks and potential conflicts of interest related to its plan to allow Bitcoin investments in 401(k) retirement accounts, according to Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, who sought answers have the financial services heavyweight before May 18th. Fidelity announced last week that it would allow people to allocate up to 20 percent of their retirement savings to Bitcoin towards the end of the year.

Massachusetts Sen. Elizabeth Warren and Minnesota Sen. Tina Smith earlier this week sent a letter to Abigail Johnson, Fidelity’s chief executive officer, asking, among other things, why they addressed earlier concerns from the Department of Labor regarding the Didn’t consider cryptocurrency inclusion in 401(k) retirement accounts.

“Why did Fidelity ignore DOL’s serious concerns about the prudence of a trustee’s decision to expose participants in the 401(k) plan to direct investments in cryptocurrencies?” the senators wrote.

Fidelity’s push to extend investment to 401(k) is said to be based on growing employee demand. Although the company clarified that it would not charge for the service, the senators still wanted to know if the proposed customers would be charged at all.

In the previous announcement, Fidelity said it would only allow about 20% of a given client’s portfolio to be invested in digital currencies, but the assertion of public demand was primarily faulted by the senators, who wrote: “Despite a lack of demand for this option.” – Only 2 percent of employers expressed an interest in adding cryptocurrency to their 401(k) menu – Fidelity has decided to go full force ahead and support Bitcoin investments.”

Fidelity did not respond to the senators’ specific questions. But in an email to CNN Business, a spokesman said the company would respond to them directly.

“As a Massachusetts-based company with a proven history of serving our customers’ best interests for more than 75 years, we look forward to continuing our respectful dialogue with policymakers to responsibly provide access with all appropriate consumer protections and educational guidance to sponsors when they plan.” consider offering this innovative product,” wrote Fidelity. Senator Elizabeth Warren expresses concern about Fidelity’s bitcoin retirement plan

Ryan Sederquist

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