US Senators Urge Fidelity to Reconsider Bitcoin Deals After FTX Blast

Crypto-skeptical senators have suggested that the collapse of FTX showed "pretty clearly" that the digital asset industry has many " serious problems".

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US Senators Elizabeth Warren, Tina Smith and Richard Durbin have renewed their calls for Fidelity Investments to reconsider offering a 401(k) retirement product tied to Bitcoin (BTC).

In a November 21 letter to Fidelity Investments CEO Abigail Johnson, the three senators said the recent fall of FTX is more than just another reason the 4 $500 billion reconsiders its Bitcoin offer to retirement savers, saying:

"The recent implosion of FTX, a cryptocurrency exchange, has made it clear that the digital asset industry is in serious trouble."

The senators also added that “charismatic prodigies, opportunistic fraudsters and self-proclaimed investment advisers” have played a huge role in manipulating the price of Bitcoin (BTC), which in turn has had an impact on the 401(k) retirement savings holders who have invested in Fidelity's Bitcoin product:

"Since July, when we last raised concerns with you about the deeply concerning prospect of exposing workplace pensions to Bitcoin, its value has plummeted."

“As the scale of damage from FTX continues to unfold, the contagion is being felt across the digital asset market. Bitcoin is no exception,” the senators commented.

The senators' letter to Fidelity's CEO was the second in recent months, with the first letter dated July 26 asking for an explanation of why Fidelity decided to expose its customers to a Bitcoin 401(k) product to begin.< /p>

“Since our previous letter, the digital asset industry has only become more volatile, tumultuous and chaotic – all hallmarks of an asset class that no plan sponsor or retirement saver should not want to approach,” the senators wrote.