US Senators Elizabeth Warren, Dick Durbin and Tina Smith have called on Fidelity Investments, one of the nation’s largest financial services providers, to reconsider its decision to grant pension plan participants exposure to Bitcoin following of the FTX implosion, in a letter released on Monday.
See related article: Who is exposed to FTX? A build running on a fast moving target
Fast facts
- Lawmakers said the digital asset industry has become more volatile, tumultuous and chaotic since their previous letter sent in July 2022, and that these are characteristics of an asset class no one planning for retirement should approach.
- They added that the recent implosion of cryptocurrency exchange FTX has made it clear that the digital asset industry is in trouble and is plagued by charismatic actors, opportunistic fraudsters and self-proclaimed investment advisers promoting financial products with little or no transparency.
- The senators wrote that the deceptive and potentially illegal actions of a few have impacted the valuations of Bitcoin and other digital assets, even though the full extent of FTX’s collapse is still unfolding.
- As bitcoin prices fall to two-year lows, Fidelity should protect sponsors and participants and reconsider its decision to offer exposure to bitcoin, lawmakers said.
- Fidelity Investments is one of the largest 401(k) providers in the world and has announced a to plan in April 2022 where individuals could allocate part of their retirement savings to Bitcoin.
- Separately, after the collapse of FTX, the Ontario Teachers’ Pension Plan said it would write off its US$95 million investment in FTX to zero by the end of this year.
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