The U.S. Department of Labor has expressed “serious concerns” that Fidelity Investments is allowing investors to deposit bitcoin into their 401(k) accounts for retirement savings. A Labor Department official said this would pose risks to Americans’ retirement security, stressing that “cryptocurrency could pose serious risks to retirement savings.”
U.S. Department of Labor has ‘serious concerns’ over Fidelity’s Bitcoin 401(k) product
The U.S. Department of Labor is deeply concerned about Fidelity Investments’ new product that allows investors to put 20% of their 401(k) savings and contributions into Bitcoin (BTC). A 401(k) is a popular workplace savings plan in the U.S. with tax benefits as an incentive to invest in retirement.
Ali Khawar, acting assistant secretary of the Labor Department’s Employee Benefit and Security Bureau, told The Wall Street Journal on Friday:
We have serious concerns about what Fidelity has done.
Khawar explained that the Department of Labor believes that Fidelity’s allowing savers to deposit bitcoin into their 401(k) accounts puts Americans’ retirement security at risk.
The official said he sees cryptocurrencies as speculative. “There’s a lot of hype about ‘you have to get in now or you’ll be left behind,'” he argued.
Khawar wrote a blog post on the Labor Department website in March raising concerns about retirement plans that invest in cryptocurrencies. He detailed:
The U.S. Department of Labor has expressed serious concerns about the decision to plan to allow participants to invest directly in cryptocurrencies or related products such as NFTs, coins, and cryptoassets.
“Cryptocurrencies could pose serious risks to retirement savings,” he explained, citing valuation challenges, price volatility and a changing regulatory environment.
Do you think the U.S. Department of Labor should be concerned about Fidelity allowing investors to deposit Bitcoin into their 401(k) accounts? Let us know in the comments section below.
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