In a letter made public, U.S. Senators Tina Smith, Dick Durbin, and Elizabeth Warren urged Fidelity Investments, one of the biggest financial services companies in the nation, to reconsider its decision to allow participants in retirement plans exposure to Bitcoin following the collapse of FTX.
The MPs claimed that since their previous letter, which was delivered in July 2022, the digital asset market has become more erratic, turbulent, and chaotic, and that these are characteristics of an asset class no one who is planning for retirement should go near.
They also mentioned a recent cryptocurrency exchange collapse. The charismatic players, opportunistic con artists, and self-described investment advisors that promote financial products with little to no transparency are an issue in the digital asset business, according to FTX.
The senators claimed that even though the full magnitude of FTX’s collapse is still developing, the dishonest and maybe criminal conduct of a select few have had an effect on the valuations of Bitcoin and other digital assets.
The senators argued that Fidelity should protect sponsors and participants and rethink its decision to give Bitcoin exposure after the price of the cryptocurrency fell to two-year lows.
One of the biggest 401(k) providers in the world, Fidelity Investments, revealed a plan in April 2022 under which people might choose to invest some of their retirement funds in Bitcoin.
Separately, the Ontario Teachers’ Pension Plan announced that it will write off its US$95 million investment in FTX to zero by the end of this year after the company’s failure.