U.S. Senators Elizabeth Warren (D-MA), Tina Smith (D-MI) and Richard Durbin (D-IL) have reiterated Tuesday that Fidelity Investments should reconsider letting retail clients put a portion of their savings into bitcoin (BTC-USD) following the recent collapse of cryptocurrency exchange FTX.
Recall towards the end of April when the asset management giant said it will start to offer bitcoin-linked 401(K) plans. But bitcoin (BTC-USD) as well as the broader crypto market had been dealt a slew of heavy blows since then, including the high-profile implosions of crypto lender Celsius, Terra ecosystem, hedge fund Three Arrows Capital and Sam Bankman-Fried's FTX. BTC changed hands at just $16.15K at the time of writing, down 16% in the past month, -66% year-to-date and -71% from a year ago.
The demise of FTX "has made it abundantly clear the digital asset industry has serious problems,” the Senators wrote in a letter addressed to Fidelity CEO Abigail Johnson. "The ill-advised, deceptive, and potentially illegal actions of a few have a direct impact on the valuation of bitcoin and other digital assets."
“Since our previous letter, the digital asset industry has only grown more volatile, tumultuous, and chaotic—all features of an asset class no plan sponsor or person saving for retirement should want to go anywhere near,” the Senators wrote.
As the FTX fiasco sends shockwaves through the wider crypto ecosystem, lawmakers and regulators have increasingly put crypto-related firms under the spotlight. SoFi Technologies (SOFI), for example, has seen its stock trading in a downward spiral this week after legislators sent letters to financial regulators urging them to review the company's crypto trading activities.
Earlier this month, (Nov. 3) Fidelity to offer commission-free bitcoin, ether trading to retail.
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