US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, ‘Serious Problems’ in Crypto Industry

Numerous U.S. senators called for Fidelity Investments' reconsideration of allowing bitcoin to be included in 401(k), retirement plans. Abigail Johnson, a Fidelity CEO, stated that "the recent implosion FTX, a cryptocurrency trading platform, has made it abundantly obvious the digital asset sector has serious problems."

US Senators Demand Fidelity Stop Offering Bitcoin Retirement Plans

Three U.S. senators wrote Monday to Fidelity Investments CEO Abigail Johnson about the firm's Bitcoin offerings in 401k retirement plans. Senators Elizabeth Warren (D.MA), Richard J. Durbin, and Tina Smith signed the letter.

The lawmakers reiterated their concerns regarding Fidelity's decision to allow bitcoin exposure in retirement plans.

They said: "Since the previous letter, digital asset industry has only become more volatile, turbulent, and chaotic — all characteristics of an asset class, no plan sponsor, or person saving for retirement should wish to go any near."

Recent collapse of FTX, a cryptocurrency trading platform, has highlighted the serious problems in the digital asset sector. There are many charismatic wunderkinds and opportunistic scamsters in the industry. Self-proclaimed investment advisors promote financial products with very little transparency.

On Nov. 11, crypto exchange FTX filed for Chapter 11 bankruptcy. The company is being investigated for allegedly mishandling customer funds.

The lawmakers warned that the "ill-advised and deceptive actions of a few" have an impact on bitcoin and other digital assets' valuations. While the full impact of FTX's damage is still being seen, it is spreading rapidly across the wider digital asset market. Bitcoin is not an exception.

Johnson was also told by the lawmakers that "In light of this risks and constant warning signs, Fidelity Investments is urged to again strongly urge plan sponsors and plan participant to do what is best — seriously reconsider its decision not to allow plan sponsor to offer bitcoin exposure for plan participants."

We are already facing a retirement security crisis by many means. This should not be made worse if retirement savings are exposed to unnecessary risk. Investment strategies that are based on the possibility of catching lightning or driven by fear of missing out are doomed to failure.

The U.S. Department of Labor was disturbed by Fidelity's decision offering bitcoin investments in 401 (k) plans. Ali Khawar, acting assistant Secretary of the Labor Department’s Employee Benefits Security Administration, stated that "we have grave concerns about what Fidelity had done." Janet Yellen, Treasury Secretary, has warned crypto is "very dangerous" and stressed that it is not suitable for most retirement savers.

Johnson received a letter from Senator Warren earlier this year asking for clarifications about the financial company's decision to permit bitcoin exposure in retirement products. A number of U.S. legislators introduced the Retirement Savings Modernization Act in September to allow workers to diversify their assets in 401(k).

What do you think of the U.S. senators asking Fidelity not to allow bitcoin investments in 401 (k) plans. Comment below.

Frequently Asked Questions

Can I get physical ownership of gold in my IRA

Many people wonder if they are allowed to possess physical gold within an IRA account. This is a legitimate question since there is no legal way.

But if you carefully examine the law, there's nothing stopping you from owning gold in your IRA.

Most people don’t realize just how much they could save by putting your gold in an IRA, rather than keeping it at home.

It's very easy to dispose of gold coins, but much harder to make an IRA. If you decide to keep your precious metal in your own home you will have to pay two taxes. Once for the IRS and once for the state where you live.

It is possible to lose your gold and pay twice as much tax. Why would you keep your gold in the house?

It might seem that you want the security of knowing your gold is safe inside your home. You can protect your gold from theft by storing it somewhere more secure.

If you're planning on visiting frequently, it is best to keep your gold safe at home. If you leave your precious gold unattended thieves will easily steal it.

An insured vault is a better choice for gold storage. Then, your gold will be protected from fire, flood, earthquake, and robbery.

One advantage of storing your gold safely in a vault is the fact that you don't have to worry too much about property tax. Instead, you will have to pay income tax for any gains you make selling your gold.

An IRA is a way to avoid paying taxes on gold. You won't be subject to income tax if you earn interest from your gold with an IRA.

Capital gains tax doesn't apply to gold. That means you have the right to cash your investment at whatever time you choose.

And since IRAs are federally regulated, you won't have any trouble getting your gold transferred to another bank if you move.

The bottom line is: You can own gold in an IRA. Fear of losing it is the only thing that will hold you back.

What are the pros & con's of a golden IRA?

An excellent investment vehicle is a gold IRA. This is for people who wish to diversify but do not have access to traditional banking services. It allows you to invest in precious metals such as gold, silver, and platinum without paying taxes on any gains until they're withdrawn from the account.

However, early withdrawals of funds will incur ordinary income tax. But because these funds are held outside of the country, there is little chance of them being seized by creditors when you default on your loan.

So if you like owning gold without worrying about taxes, a gold IRA may be right for you.

What proportion of your portfolio should you have in precious metals

The best way to avoid inflation is to invest in physical gold. Because precious metals are a long-term investment, you can not only buy in to the current value but also the future potential of these assets. You can expect your investment to increase in value with the rise of metal prices.

You will be eligible for tax benefits if you keep your investments in place for at least five consecutive years. If you decide to sell your investments after that period, you will be subject to capital gains tax. Learn more about how you can buy gold coins on our website.

How much do gold IRA fees cost?

The average annual fee to open an individual retirement account (IRA), is $1,000. There are many types and types of IRAs. These include traditional, Roth or SEP-IRAs as well as SIMPLE IRAs. Each type has their own set of rules. For example, you may have to pay taxes on any earnings from your investments if they're not tax-deferred. It is important to consider how long you plan on keeping the money. If you are planning to hold onto your money for a longer time, you will likely save more money opening a Traditional IRA than a Roth IRA.

A traditional IRA allows for contributions up to $5500 ($6,500 if older than 50). A Roth IRA allows you to contribute unlimited amounts every year. The difference is simple. With a traditional IRA you can withdraw the money when you retire and pay no taxes. With a Roth IRA, however, any withdrawals will be subject to taxes.

Are you able to keep precious metals in your IRA?

This depends on the IRA's owner's desire to diversify or keep his holdings in silver and gold.

He can choose to diversify if he so desires. He could either buy bars of physical gold and/or sterling from a dealer or simply sell these items back at the end. Imagine he doesn't desire to sell off his precious metals investments. In this case, he should hold onto the investments as they are perfect for storing inside an IRA account.

Are precious metal IRAs a smart investment?

How much risk you are willing to take for an IRA account's value loss will determine the answer. If you have $10,000 cash, they make sense as long as you don’t expect your IRA account to grow rapidly. These may not be the best option if you are looking to save for retirement over many decades and invest in assets that will increase in value (e.g. gold). They also involve fees which could eat into any gains.

What are the 3 types of IRA?

There are three basic types for IRAs. Each type of IRA has its pros and cons. We'll go over each of them below.

Traditional Individual Retirement Account (IRA).

Traditional IRAs allow you to make pretax contributions to an account that allows you to defer taxes while still earning interest. When you retire, your withdrawals are not subject to tax.

Roth IRA

Roth IRAs allow for you to make after-tax deposits into an account. The earnings are tax-free. The account allows you to withdraw funds for retirement.


This is similar to a Roth IRA, except that it requires employees to make additional contributions. The additional contributions are subject to tax, but earnings accrue tax-deferred. When you leave the company the whole amount may be converted to a Roth IRA.


  • You can only purchase gold bars of at least 99.5% purity. (
  • Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (
  • To qualify as IRA allowable precious metals and be accepted by STRATA, the following minimum fineness requirements must be met: Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. (
  • The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (

External Links

How To

Precious metals approved by the IRA

IRA-approved precious materials are excellent investments whether you're looking for ways to save money for retirement or to invest in your next business venture. There are many options available to diversify and protect your portfolio from gold bars through silver coins.

Precious metal investment products come in two main forms. Physical bullion products such bars or coins are considered to be physical assets, as they exist in tangible form. On the other hand, exchange-traded funds (ETFs) are financial instruments that track the price movements of an underlying asset, such as gold. ETFs can be purchased directly from the company issuing them, and trade in the same way as stocks on stock exchanges.

There are many types of precious metals that you can purchase. For jewelry and ornamentation, gold and silver are common. Platinum and palladium are associated more with luxury items. Palladium holds its value better than that of platinum which makes it ideal to be used in industrial applications. Silver is also useful for industrial purposes, although it is usually preferred for decorative applications.

Physical bullion products tend to be more expensive due to the cost of mining and refining raw materials. These products are generally safer and more secure than paper currencies. For example, consumers can lose confidence in the currency or look for alternative currencies when the U.S. dollars loses its purchasing power. Contrary to this, physical bullion does not rely on trust among countries or between companies. Instead, they have the backing of central banks and governments. This gives customers confidence.

Prices for gold fluctuate depending on demand and supply. The price of gold will rise if there is more demand. Conversely, a decrease in supply can cause the price to fall. Investors can profit from fluctuating gold prices by taking advantage of this dynamic. Physical bullion investors benefit because they have a greater return on their capital.

Precious metals, unlike other investments, are immune to economic recessions or changes in interest rates. As long as demand remains strong, the price of gold will continue to rise. Precious metals, which are safe havens for times of uncertainty, are therefore considered to be safe havens.

These precious metals are the most in demand:

  • Gold – Gold is the oldest precious metal. Gold is also called “yellow-metal”. Gold is a common name, but it's a rare element that can be found underground. Most of the world’s remaining gold reserves are found in South Africa.
  • Silver – Silver, which is second in value after gold, is silver. Silver is mined from the earth's natural resources. However, silver is usually extracted from ore and not from rock formations. Because of its durability and malleability, as well as resistance to tarnishing, silver is widely used in commerce and industry. The United States produces over 98% of all global silver production.
  • Platinum – Platinum is the third most valuable precious metal. It can be used in many industrial applications, including fuel cells, catalysts, and high-end medical devices. You can also use platinum in dentistry to make dental crowns and bridges.
  • Palladium: Palladium is the 4th most valuable precious metallic. Because of its strength, stability and popularity, Palladium is rapidly gaining in value among manufacturers. Palladium is also used in electronics, automobiles, aerospace, and military technology.
  • Rhodium – Rhodium has been ranked fifth among precious metals. Rhodium, although it is rare, is highly sought after for its use in automotive catalysts.
  • Ruthenium: Ruthenium is sixth most valuable precious metallic. While palladium and platinum are scarce, ruthenium has a large supply. It is used in steelmaking, chemical manufacturing, and engine design.
  • Iridium – Iridium is the seventh-most valuable precious metal. Iridium is a key component in satellite technology. It is used to create orbiting satellites which transmit television signals, telephone calls and other communications.
  • Osmium (Osmium) – Osmium has the eighth highest value precious metal. Osmium is commonly used in nuclear reactors because of its ability to withstand extreme temperatures. Osmium is used in medicine, cutting tools, jewelry, as well as medicine.
  • Rhenium – Rhenium is the ninth most valuable precious metal. Rhenium is used in refining oil and gas, semiconductors, and rocketry.
  • Iodine – Iodine is the tenth-most valuable precious metal. Iodine can be used in radiography, photography, and pharmaceuticals.


By: Kevin Helms
Title: US Senators Urge Fidelity to Stop Offering Bitcoin in 401(k) Plans Citing FTX Collapse, ‘Serious Problems’ in Crypto Industry
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Published Date: Wed, 23 Nov 2022 00:30:51 +0000

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