US Labor Department Has Concerns On Fidelity’s BTC Retirement Plan

The US Labor Department has concerns over Fidelity’s BTC Retirement plan and offered some words of wisdom to share so let’s read more today in our latest Bitcoin news today.

The US Labor Department has concerns over the inclusion of crypto including Bitcoin in American retirement accounts. A few days after Fidelity opened the retirement accounts to BTC, the acting assistant secretary of the Employee Benefits Security Administration Ali Khawar said they have grave concerns with what Fidelity has done. The EBSA is an agency in the Department of Labor that oversees employer-sponsored retirement plans in the US. The financial services firm announced that it will allow members of the 401K retirement savings program to invest up by 20% in the leading crypto.

The product is expected to launch this summer, the tech company MicroStrategy led by BTC Bull Michael Saylor was the first firm to join. Dave Gray who is the head of workplace retirement offerings at Fidelity investments and said:

“We started to hear a growing interest from plan sponsors, organically, as to how could Bitcoin or how could digital assets be offered in a retirement plan.”

This is not the first time the Department of Labor shared concerns about crypto in American retirement accounts. It cited the asset class’ volatility, participants’ ability to make a decision about crypto, and the shaky regulatory environment among other reasons why participants can exercise caution over the inclusion in their portfolios.

“The Department cautions plan fiduciaries to exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”

A year ago, the exchange Coinbase and the 401K provider ForUsAll announced crypto fueled retirement option. The assets available extended far beyond BTC and included tokens like Aglorand and UNI but the crypto allocation was restricted to 5% of the portfolio. iTrustCapital raised $125 million to expand the crypto IRA offering and like the 401K plan, the IRA retirement accounts offer tax-advantaged investing via the amount participants can contribute is getting smaller. With Fidelity now entering the space and added crypto to retirement portfolio that has reached the mainstream.

As recently reported, Fidelity will offer investors a chance to add BTC to their 401K retirement accounts and the reports show that the asset manager stated that some of the administrators plan to offer employees means of investing in BTC via dedicated digital asset accounts. Fidelity has $4.2 trillion worth of assets under management.