US senators urge Fidelity to reconsider its Bitcoin offerings after FTX blow-up

United States senators Elizabeth Warren, Tina Smith, and Richard Durbin person renewed their calls for Fidelity Investments to reconsider offering a Bitcoin (BTC)-linked 401(k) status product. 

In a letter addressed to Fidelity Investments CEO Abigail Johnson connected Nov. 21, the 3 senators said the caller autumn of FTX is much crushed than immoderate for the $4.5 cardinal plus absorption steadfast to reconsider its Bitcoin offering to status savers, stating:

“The caller implosion of FTX, a cryptocurrency exchange, has made it abundantly wide the integer plus manufacture has superior problems.”

The senators besides added that “charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed concern advisors” person played a immense relation successful manipulating the terms of Bitcoin (BTC), which successful crook has impacted 401(k) status savings holders who person invested successful Fidelity’s Bitcoin product:

“Since July, erstwhile we past raised concerns with you astir the profoundly concerning imaginable of exposing workplace status plans to Bitcoin, its worth has plummeted."

“While the afloat grade of the harm caused by FTX continues to unfold, the contagion is being felt crossed the broader integer plus market. Bitcoin is nary exception,” the senators commented.

The senators' missive to the Fidelity CEO was the 2nd successful caller months, with the archetypal missive connected Jul. 26 demanding an mentation of wherefore Fidelity decided to exposure its customers to a Bitcoin 401(k) merchandise to statesman with.

“Since our erstwhile letter, the integer plus manufacture has lone grown much volatile, tumultuous, and chaotic—all features of an plus people nary program sponsor oregon idiosyncratic redeeming for status should privation to spell anyplace near,” the senators wrote.

Durbin, Smith and Warren besides noted that immoderate 32 cardinal Americans and 22,000 U.S. employers usage Fidelity arsenic a workplace status relationship and employer-sponsored plan.

The senators added that with a status information situation already playing retired successful the country, Fidelity shouldn’t beryllium exposing its customer’s status savings to an “unnecessary risk.”

“In airy of these risks and continuous informing signs, we again powerfully impulse Fidelity Investments to bash what is champion for program sponsors and program participants—seriously reconsider its determination to let program sponsors to connection Bitcoin vulnerability to program participants.”

Cointelegraph reached retired to Fidelity for their remark connected the missive but did not person an contiguous response.

Related: Fidelity’s crypto ambitions are bigger than expected: report

Meanwhile, not each U.S. lawmakers look to person sided with the 3 crypto-skeptic senators successful the past. 

In May. 2022, Republican Senator Tommy Tuberville introduced the Financial Freedom Act into the U.S. Congress, which serves to let U.S. residents to adhd cryptocurrency to their 401(k) status savings program without being taxable to regulatory influence.

Fidelity has continued to summation its concern successful the integer plus space, with plans to expand its integer plus part by 25% with 100 caller employees by the extremity of Q1 2023.