- Senators Elizabeth Warren and Tina Smith asked Fidelity to answer questions about plans to allow Bitcoin investment in 401 (k) plans.
- They wrote a letter asking for answers by May 18 on volatility and other potential risks.
- Senator said there could be a potential conflict of interest as Fidelity was engaged in Bitcoin and Ethereum mining operations.
Fidelity needs to address the risks and potential conflicts of interest associated with the plans it allows. Bitcoin An investment in a 401 (k) severance pay account that asked major financial services to respond by later this month, according to Senator Elizabeth Warren of Massachusetts and Senator Tina Smith of Minnesota.
Senator Sent a letter to Fidelity CEO Abigail Johnson Following the company’s announcement in April, dated May 4 Open a 401 (k) plan to Bitcoin By mid-2022, the newspaper reported on Thursday. With $ 2.7 trillion in assets for 20 million customers, the company was the first major retirement plan provider to make such a move.
“In short, investing in cryptocurrencies is a risky and speculative bet, and we are concerned that Fidelity will take these risks with the retirement savings of millions of Americans,” the Democratic Party wrote. I am. Approach to Bitcoin investment.
“Bitcoin, a cryptocurrency that your company considers to be sound enough for your client’s retirement savings account, has a particularly volatile history,” Warren and Smith wrote.
They recalled that Bitcoin soared to nearly $ 69,000 in November, then fell to $ 33,000 in “a little over two months” and fell by as much as 30% in a single day.
Tesla Bosmusk.It is exacerbated by its susceptibility to the whims of only a handful of influencers.The value of Bitcoin fluctuated by 8% just by tweeting Elon Musk, “said Bitcoin supporters.
They also asked about the potential risks of fraud and theft caused by investing in Bitcoin. Warren is part of the Senate’s subcommittee on financial institutions and consumer protection, among other missions. Warren also sits with Smith at the Banking, Housing and Urban Affairs Commission.
Warren and Smith also said they were concerned about Fidelity’s “potential conflict of interest” and the extent to which it could have influenced the decision to offer Bitcoin. They noted the 2017 announcement that Fidelity set a small Bitcoin, Ethereum Expansion of cryptocurrency activities, including the mining business that was making money and the subsequent establishment of a crypto fund for wealthy investors.
“Despite the lack of demand for this option, only 2% of employers were interested in adding cryptocurrencies to their 401 (k) menus. Fidelity supports investment in Bitcoin. By doing so, I decided to move forward at full speed, “the lawmaker wrote.
They asked Fidelity how much money they had earned from crypto mining activities since they started mining operations.
In another question, they asked: “When Fidelity decides to allow Bitcoin to be sold in its retirement account, how does the company conflict with its own interests, given that the company is currently a Bitcoin miner and a Bitcoin provider? Did you deal with? ”
Bitcoin on Thursday traded at around $ 38,555, down about 17% so far in 2022.