- Boston-based Fidelity is the leading supplier of 401(k) plans in the United States.
- It is now very evident the digital asset business has major flaws, the senators said.
After the recent failure of the cryptocurrency exchange FTX, a group of U.S. senators have sent another letter to the financial behemoth Fidelity Investments, urging it not to sell Bitcoin to its clients. The letter was signed by three senators from three different states: Tina Smith of Minnesota, Elizabeth Warren of Massachusetts, and Richard Durbin of Illinois.
Boston-based Fidelity is the leading supplier of 401(k) plans in the United States and one of the largest asset managers in the world. With the introduction of a new product in April, the company now provides Bitcoin access to businesses and their employees.
Post FTX Fiasco Effects
However, Senators Warren and Smith wrote to Fidelity in May to express their disapproval of the plan. A fresh letter, co-signed by Senator Durbin, was issued this time.
The signed letter noted:
“Once again, we strongly urge Fidelity Investments to reconsider its decision to allow 401(k) plan sponsors to expose plan participants to Bitcoin.”
It is now very evident the digital asset business has major flaws, the senators said, citing the recent crash of cryptocurrency exchange FTX.
It further read:
“The industry is full of charismatic wunderkinds, opportunistic fraudsters, and self-proclaimed investment advisors promoting financial products with little to no transparency.”
FTX, a major cryptocurrency exchange, has declared bankruptcy this month after losing billions of dollars. Through its sibling trading business Alameda Research, the exchange reportedly placed high-stakes investment wagers with customer funds. The FTX disclosed its debt to its top 50 creditors, totaling $3.1 billion, in a document filed on Saturday.