Three U.S. senators ask Fidelity to reconsider bitcoin exposure in retirement plans

Three U.S. senators have again asked Fidelity Investments to reconsider a decision to allow retirement plan participants to invest in bitcoin, saying the industry has become increasingly "volatile, tumultuous and chaotic."

Sens. Richard Durbin, D-Ill., Elizabeth Warren, D-Mass. and Tina Smith, D-Minn., sent the Nov. 21 letter to Fidelity Investments CEO Abigail Johnson after first raising the issue in July. Durbin is the number-two Democrat in the Senate as Majority Whip, while Smith and Warren are on the Banking Committee. 

"Fidelity Investments has opted to expand beyond traditional finance and delve into the highly unstable and increasingly risky digital asset market," the senators wrote. "The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems. The industry is full of charismatic wunderkinds, opportunistic fraudsters and self-proclaimed investment advisers promoting financial products with little to no transparency."

Fidelity said in April that it was readying a plan that would allow 401(k) plan holders to allocate up to 20% of their retirement savings into bitcoin. In the July letter, the senators argued that the cap signaled that it was aware of the dangers of investing in the cryptocurrency. 

Fidelity has been prioritizing growth of digital assets services across the company. Its Fidelity Digital Assets subsidiary recently added ether trading for institutional customers and is planning to launch a new retail trading platform called Fidelity Crypto.