Senator Elizabeth Warren of Massachusetts addressed a joint letter to Fidelity Investments this week in response to the firm’s decision to accept Bitcoin on its platform.
Fidelity said in April that employees of the 23,000 organizations that use its 401(k) pension plan services could invest up to 20% in Bitcoin. For 20 million clients, the business manages $2.7 trillion in assets.
The decision, however, has aroused concerns among the US Labor Department and crypto’s most vocal critics. Warren asked Fidelity CEO Abigail Johnson what steps the firm will take to address “the considerable risks of fraud, theft, and loss posed by these assets,” in a letter co-signed by Minnesota Senator Tina Smith.
Warren raises concerns about conflicts of interest.
Senator Warren used her customary hyperbole, alleging that “Bitcoin’s volatility is worsened by its sensitivity to the whims of a small number of influencers.”
The Democrats have given Fidelity until May 18 to respond to their inquiries concerning its Bitcoin investment strategy.
They referenced a number of mainstream media FUD pieces on large price changes, including the fact that Bitcoin is currently trading at a 47 percent discount to its all-time high, which occurred six months ago.
They also claimed that the mining process was highly centralized, claiming that “one research indicates that only 10% of Bitcoin miners are responsible for processing 90% of Bitcoin.”
A potential conflict of interest was also mentioned. Fidelity had announced in 2017 that it had set up a tiny Bitcoin and Ethereum mining operation, according to the letter.
“We are also concerned about Fidelity’s potential conflicts of interest and the extent to which they may have affected the decision to offer Bitcoin.”
Warren, who has dubbed cryptocurrency the “new shadow bank” run by “shadowy faceless organizations of super-coders,” is doing everything she can to keep Americans out of this asset class.
Bill for Financial Liberty
Thankfully, not every American politician is as anti-crypto as the member of the finance, housing, and urban affairs committee. Senator Tommy Tuberville of Alabama has offered a glimpse of hope in the form of the Financial Freedom Act.
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