Senators Call on Fidelity to Pull the Plug on its Bitcoin Retirement Plan

November 21 saw the release of a further letter from US Senators calling on Fidelity Investments to reevaluate providing Bitcoin to its clients in the wake of the complete failure of FTX, the US-based cryptocurrency exchange.

Senators Tina Smith from Minnesota, Richard Durbin from Illinois, and Elizabeth Warren from Massachusetts wrote to Abigail Johnson, the CEO of Fidelity on November 21 to demand that financial services company Fidelity Investment discontinue its 401(k) Bitcoin retirement offering. Fidelity revised its Bitcoin (BTC) product to retirement investors as a result of the collapse of the cryptocurrency exchange FTX, according to the three senators.

In a letter to Fidelity in July, Senators Warren and Smith expressed their disagreement with the plan. Senator Durbin endorsed the proposal in the most recent letter. The letter from November 21 states that: “Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to Bitcoin. Adding, The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.” It was also noted that: “The industry is full of charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisors promoting financial products with little to no transparency.”

The letter asserted: “Since July, when we last raised concerns with you about the deeply concerning prospect of exposing workplace retirement plans to Bitcoin, its value has plummeted. While the full extent of the damage caused by FTX continues to unfold, the contagion is being felt across the broader digital asset market. Bitcoin is no exception.” The senators went on to communicate that: “Since our previous letter, the digital asset industry has only grown more volatile, tumultuous, and chaotic—all features of an asset class no plan sponsor or person saving for retirement should want to go anywhere near.”

The three US Senators expressed their worries about the current retirement security dilemma in the United States and claimed that Fidelity ought to not be putting its clients’ retirement money at undue jeopardy.