Three Democratic senators have asked Fidelity Investments, one of the world’s largest 401(k) providers, to stop allowing pension plan sponsors toto bitcoin and other cryptocurrency investments.
In a letter Monday, Illinois Senator Dick Durbin, Massachusetts Senator Elizabeth Warren and Minnesota Senator Tina Smith expressed concern about the volatility of the crypto market highlighted by, the second largest exchange in the industry. Meanwhile, Bitcoin fell to a two-year low of $16,209.
“The FTX collapse that wreaked havoc on the digital asset market cannot be ignored,” the senators wrote. “By many measures, we are already in a retirement security crisis, and it must not be made worse by putting retirement savings at unnecessary risk.”
A Fidelity spokeswoman declined to address the senators’ specific concerns, but said “recent events in the digital asset industry have further underscored the importance of standards and safeguards.” It initially announced crypto investments in its 401(k) accounts earlier this year, citing “by employers and their employees.
The letter marks yet another cloud over the crypto world, which was already struggling amid a rapid decline in market values over the past year.
While the letter from the three senators is notable, it is just the latest in a series of moves from Capitol Hill. The US House Financial Services Committee plans to hold.
“Unfortunately, this event is just one of many examples of cryptocurrency platforms that have collapsed in the past year alone,” Congresswoman Maxine Waters, D-Calif., and the committee’s chairwoman, said in a statement last week. She added that legislative action is needed to establish federal oversight of companies handling digital assets like bitcoin so they “can’t operate in the shadows.”