Labor Department has 'grave concerns' over Fidelity's 401(k) bitcoin plans

Quick Take

  • The US Labor Department said it has “grave concerns” about a decision to offer bitcoin as an investment option.
  • It has scheduled a meeting with Fidelity to discuss the matter.

The US Labor Department will discuss concerns with Fidelity Investments over its decision to allow retirement savers to include bitcoin in their portfolios.

On Tuesday, Fidelity said it would allow clients to allocate as much as 20% of their 401(k) retirement savings to bitcoin as long as employers permitted it.

“We have grave concerns with what Fidelity has done. There is a lot of hype around ‘you have to get in now because you will be left behind otherwise,’” Ali Khawar, acting assistant secretary of the Employee Benefits Security Administration, told the Wall Street Journal.

According to Khawar, the Labor Department, which regulates company-sponsored retirement plans, has particular concerns about the potential 20% bitcoin allocation because of market volatility. Fidelity itself has said that number may be subject to change. 

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“For the average American, the need for retirement savings in their old age is significant. We are not talking about millionaires and billionaires that have a ton of other assets to draw down,” Khawar added.

Fidelity, which manages $4.