US Senators Ask Fidelity to Reconsider Bitcoin 401(k) Offerings Following FTX Collapse

Fidelity should reconsider allowing retail clients exposure to bitcoin in their retirement accounts in light of the FTX collapse, said three Democratic Senators in a letter on Monday.

The U.S. based financial services firm said in April that it wanted to allow investors to put bitcoin in their 401(k)s. Fidelity’s retirement accounts are big business: The company had an estimated $2.4 trillion in 401(k) assets in 2020, or more than a third of the total U.S. market at that time, according to research firm Cerulli Associates.

The Senators – Richard Durbin (D-Ill.), Elizabeth Warren (D-Mass.), and Tina Smith (D-Minn.) – had previously expressed their trepidation over the plan in July, and the Department of Labor had similar concerns in April.

"The ill-advised, deceptive, and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets," this latest letter read.

Already deep in a bear market, bitcoin (BTC) has fallen even further since the FTX collapse earlier this month, touching a two-year low below $15,500 on Monday. The price has bounced to $16,100 at press time.

Fidelity was contacted by CoinDesk.

Read more: Dick Durbin Joins US Senators Criticizing Fidelity’s Plan to Include Bitcoin in 401(k) Plans