U.S. Officials have urged Fidelity Investments, one of the biggest asset managers in the world, to rethink its decision to include exposure to Bitcoin in its 401(K) plans, arguing that the FTX collapse has ruined the state of the market and increased volatility in the space.
Officials Show Concern Over Fidelity’s Decision
The U.S. government has again expressed concern to Fidelity Investment regarding its slated plans to expose its firm to Bitcoin use. The recent FTX crash, which caused the market to become unstable, is related to the concerns voiced by the U.S. government.
Senator Elizabeth Warren and Richard Dublin, two members of the US government, wrote letters to Fidelity urging them not to take this course of action.
In April 2022, Fidelity introduced a digital asset account that helped businesses and gave them access to modify customer retirement savings by adding Bitcoin tokens to it.
Customers could make flexible adjustments under this plan to add a specific percentage of their portfolio—say 20%—to Bitcoin and make changes as needed.
Due to the volatility, hacks, and lack of regulation at the time, Fidelity Investments was made aware of the risks and dangers associated with trading virtual assets.
Also read:As of yesterday, another letter was written and sent to Fidelity, detailing the risks associated with these actions in great detail. In the letter excerpt, the U.S. Senators urged Fidelity to rethink its decision to expose its company to Bitcoin through the 401(K) plan.
Detriments To The Crypto Space
The crypto space has allegedly gone in all but the right direction since the last cautionary letter, becoming more unstable, dangerous, and risky.
Noting that diversifying retirement funds and investments is not a good idea or a system that will produce profits and keep investors’ funds safe.
Also mentioning that Fidelity should be reminded that over 30 million Americans rely on this company’s knowledge and judgment in making decisions and that if they violate this trust, they will put the firm at risk and in serious trouble.
They also claimed that investors felt safer using the traditional methods of conducting business than this new method Fidelity is trying to implement by entering the now unstable and dangerous crypto space.
They further defined the cryptocurrency industry as one populated by opportunists, hackers, greedy investors, and manipulators who depend on the decentralization scheme to advance their evil goals.
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