Senator Elizabeth Warren is concerned about Fidelity’s Bitcoin Pension Plan

Fidelity Investments, a US-based retirement plan provider, must address risks and potential conflicts of interest associated with its plan to allow Bitcoin investment in 401 (k) retirement funds, according to Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, who’ve already asked for answers from the financial services behemoth by May 18. Fidelity stated last week that it would allow clients to invest up to 20% of their retirement funds in Bitcoin by the end of the year.

Earlier this week, Massachusetts Senator Elizabeth Warren and Minnesota Senator Tina Smith wrote to Fidelity’s Chief Executive Officer, Abigail Johnson, asking, among many other things, why the company did not heed earlier Labor department concerns about including cryptocurrencies in 401(k) retirement funds.

“Why did Fidelity ignore DOL’s ‘serious concerns regarding the prudence of a fiduciary’s decision to expose 401(k) plan’s participants to direct investments in cryptocurrencies?” the senators wrote.

Fidelity’s desire to expand the investment into 401(k) was believed to be motivated by rising employee demand. Despite the firm’s clarification that there will be no costs for the service, the Senators asked to know if the intended clients will be subject to any fees at all.

Fidelity previously stated that it would only allow about 20% of a specific client’s portfolio to be invested in virtual currencies; however, the Senators wrote, “Despite a lack of demand for this option — only 2% of business owners expressed interest in adding cryptocurrency to their retirement account) menu – Fidelity has opted to relocate full speed ahead with supporting Bitcoin investment opportunities.”

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