US Senators Ask Fidelity to Reconsider Bitcoin 401(k) Offerings Following FTX Collapse

Fidelity now allows companies to offer its digital assets account as part of their 401(k) line up.

AccessTimeIconNov 22, 2022 at 6:11 p.m. UTC
Updated Nov 23, 2022 at 8:35 a.m. UTC

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

Fidelity should reconsider its retail clients' exposure to bitcoin in their retirement accounts in light of the FTX collapse, said three Democratic senators in a letter on Monday.

The U.S.-based financial services firm now allows companies to offers its digital assets account as part of their 401(k) line up, a Fidelity spokesperson told CoinDesk in a statement. Fidelity’s retirement accounts are big business: The company had an estimated $2.4 trillion in 401(k) assets in 2020, or more than a third of the total U.S. market at that time, according to research firm Cerulli Associates.

The senators – Richard Durbin (D-Ill.), Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) – had previously expressed their trepidation over the plan in July, and the Department of Labor had expressed similar concerns in April.

"The ill-advised, deceptive and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets," according to this latest letter.

Already deep in a bear market, bitcoin (BTC) has fallen even further since the FTX exchange collapse earlier this month, touching a two-year low below $15,500 on Monday. The price had rebounded to $16,500 at press time.

"Recent events in the digital assets industry have further underscored the importance of standards and safeguards," a Fidelity spokesperson said. "As a firm that has been serving customers in financial markets for over 75 years, Fidelity has always prioritized operational excellence and customer protection across all of its businesses."

UPDATE (Nov. 23, 8:35 UTC): Add Fidelity statement in last paragraph.

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Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.

CoinDesk - Unknown

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.