The senators with huge doubts about cryptocurrency suggested that the FTX meltdown revealed that there is a massive problem within the digital asset industry. Elizabeth Warren, Tina Smith, and Richard Durbin—United States senators—have revived their calls for Fidelity Investments to rethink providing a Bitcoin (BTC)-attached 401(k) retirement product. On Nov. 21, in the letter sent to Fidelity Investments CEO Abigail Johnson, the three statesmen highlighted the latest crash of FTX as a solid ground for the $4.5 trillion asset management company to reevaluate its bitcoin provision to retirement savers, mentioning:
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.”
Read: Moving on: FTX hacker distributes roughly $200 million in ETH across 12 wallets
US statesmen implore Fidelity to reappraise its Bitcoin offerings after FTX blow-up
In addition, the officials mentioned that "charismatic wunderkinds," opportunistic fraudsters," and "self-elevated investment advisors" have been instrumental parts of the prevailing manipulation in Bitcoin value, which as a result has affected 401(k) retirement savings holders who have poured their funds into Fidelity's Bitcoin product:
"Since July, when we last raised concerns with you about the deeply concerning prospect of exposing workplace retirement plans to Bitcoin, its value has plummeted."
"While the full extent of the damage caused by FTX continues to unfold, the contagion is being felt across the broader digital asset market." "Bitcoin is no exception," the senators commented.
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Senators are adamant and quite certain that the cryptocurrency industry will pose significant risks. The letter sent on the 21st of November was the second sent in the last couple of months. The first letter was sent as far back as July 26th, requesting further clarification on why Fidelity chose to keep its users informed of a Bitcoin 401(k) product to start with.
"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.
Interestingly, not all the lawmakers aligned with the propositions of these senators. But what is interesting to pay attention to is how far this proposition might go, and considering the rippling effect of the FTX crash, there might be a sudden and unexpected decision made by the parliament.
Going forward, these three senators might have a strong foothold on the direction of how the digital finance world is received considering that no one would love to be a victim of a catastrophe like FTX's exchange. By the way, the year has not been anything good for cryptocurrency except the mindblowing presales of new tokens.
Thus, the persistence of this bearish trend might empower the proposition of these senators going into the future and with increased support from other officials, a drastic measure might be reeled out to combat the prevailing popularity of cryptocurrency as a result, the growth of the industry will be restricted and withheld.This is a news story to keep an eye on.
