The office highlights the potential risks of these investments, including volatility, lack of liquidity, and fraud. The letter also notes that the Securities and Exchange Commission or any other federal regulatory body does not currently regulate digital assets.
The Attorney General’s office is concerned that retirement investors may be attracted to the high returns associated with digital assets. However, these retirees may not fully understand the risks involved because they are often less sophisticated than other investors.
Therefore, the office urges Congress to consider legislation prohibiting retirement investors from investing in digital assets. Alternatively, it suggested that Congress made it mandatory for these investors to receive special disclosures about the risks associated with these investments before they invest.
Evaluating The RSM Act
The Attorney General, Letitia James, dismissed a proposed review of the RSM (Retirement Savings Modernization) Act. He believes that the Act would harm New Yorkers’ retirement security. Letitia James asked Congress to consider the following when evaluating the Act.
First, the Act would allow 401(k) savers to invest in alternatives to traditional retirement savings options, such as hedge funds and annuities. However, such choices must not be subject to the same regulations as conventional retirement savings vehicles.
Also read:The Act would allow 401(k) savers not to borrow against their retirement savings, which could jeopardize their retirement security. Hence, He asked Congress to protect the retirement security of New Yorkers by rejecting the Retirement Savings Modernization Act.
Lawmakers Scrutinize Crypto
In recent months, crypto assets have come under intense scrutiny from lawmakers and financial regulators worldwide. The US is no exception, with several members of Congress calling for a ban on crypto transactions.
One of the most vocal critics has been Representative Maxine Waters, who chairs the House Financial Services Committee. In a recent speech, Waters presented four reasons US lawmakers should reject crypto purchases.
Meanwhile, the AG pointed out the risks posed by digital assets, saying they have no intrinsic value and there is a risk of fraud. While there is no doubt that digital assets pose some risks, it is crucial to consider their potential benefits.
For example, crypto assets could provide a much-needed boost to retirement savings, which have stagnated for years.
In addition, crypto assets could help Congress fulfill its obligation to protect workers’ retirement savings. If digital assets are adequately regulated, they could provide a safe and secure investment for workers’ retirement savings.
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